KUALA LUMPUR, August 4 — Green Packet Bhd and Privasia Technology Bhd have denied trying to get the Health Ministry's approval for a digital tracking system in relation to the proposed Control of Tobacco Product and Smoking Bill 2022.

In a Bursa Malaysia filing, Green Packet clarified that the news which quoted multiple sources claiming that efforts are underway by the two companies to obtain approval for the new system was not true.

Separately, Privasia also refuted the report in a Bursa filing.

On August 3, StarBiz reported that the two companies were seeking the Health Ministry’s approval for the new system.

The report quoted a person with information on the matter saying that the project is likely to be awarded on a direct negotiation basis and not open tenders, if approved.

"This tracking system idea will not be effective in fighting illicit cigarettes and will only add on to the cost that will eventually be passed on to consumers.

"We have already have a tax stamp on cigarette boxes for many years. It is also digitally-enabled, but it never managed to address the illicit cigarette issue.

"How will this new idea be any different than the tax stamp?” the source told the English daily.

The system seeks to complement the "Generational End Game” plan to ban the use, possession and sale of cigarettes and vape products for those born after 2007.

It also aims to address the long-standing issue of rampant illicit cigarettes in Malaysia.

StarBiz reported that a consortium of Green Packet, Privasia and France-based IN Groupe had proposed an end-to-end system called Tobacco Track and Trace (TTT).

It said that the TTT system has a security label that will be introduced for tobacco products. The label is said to contain "multi-level of security with ultra-thin definition image enabling three levels of authentication.”

"There isn’t any security label applied on tobacco products.

"It is critical for the Health Ministry to introduce the latest and most advanced holographic technologies from well-established security printer as security labels on top of tobacco products,” StarBiz quoted from a document presented to the ministry.

Via the TTT system, the consortium noted that tobacco products can be securely distributed from the factory to final consumers.

"Once the end-to-end TTT ecosystem is ready, the migration to digital stamps can be done easily. Users will have access to a complete history of distribution of the goods.

"The Health Ministry will be able to monitor the complete tobacco products distribution,” according to the document.

The report stated that TTT system will take about 13 months to fully implement.

The report also quoted a tobacco company spokesperson saying that the entire industry is against the introduction of the TTT system.

"Under the Tobacco Product and Smoking Control Bill 2022, section three requires the registration of tobacco products. This will apply for importers, manufacturers and distributors of tobacco products.

"We suspect the government will use this requirement to introduce the TTT system. Under the existing act, a registration is not required for tobacco products,” the company spokesperson was quoted saying.

The report also quoted another source which said that the existing tax stamp on cigarettes can also be scanned electronically to identify whether the tobacco product is duty-paid.

The source pointed out that tobacco companies were paying seven sen for each tax stamp used on a box of cigarettes.

"A company called Lembah Sari Sdn Bhd manufactures the tax stamps and makes seven sen for each stamp. I’m not sure whether the new TTT system will replace the tax stamp or complement it.

"Either way, there are many questions about how effective the new system will be in fighting illicit cigarettes and preventing those born after 2007 from smoking,” he reportedly said.

Meanwhile, PKR information chief Fahmi Fadzil urged the Health Ministry to give a full clarification on the accusations made by the sources quoted in the StarBiz report.

"Are these claims true? Who are involved?

How much does it cost? Does the system require a one-off payment or annual fee? And is this system really necessary?

"Since any financial implications involving the public fund must be approved by the Malaysian Parliament, a full explanation must be given,” he wrote in his Facebook posting.