BAT Malaysia puts illicit cigarette share at 56% of July market volume

British American Tobacco (Malaysia) Bhd. estimated that untaxed cigarettes made up 56% of Malaysia’s total cigarette market volume as of July 2026, slightly below the 56.2% it reported for May and above the 54% it recorded at the end of 2025.

The figure comes from the company’s third-quarter results announcement for the period ended Sept. 30, 2026, issued by BAT Malaysia and reported by The Star on Oct. 29, 2026. Managing director Daniel Hsu gave the company’s position on enforcement in a statement quoted in that report.

The company’s own volumes fell faster than the taxed market

BAT Malaysia said the legal cigarette market contracted 3.9% while its sales volume dropped 21.1%. That gap cut its market share by 1.9 percentage points.

The 56% measure refers to total industry volume as the company assesses it. The statement does not explain how the estimate is compiled.

Two data points show the share easing after a rise

The reported share climbed from 54% at end-2025 to 56.2% in May, then edged down to 56% in July. The company supplied three reference points and no monthly series.

Hsu said the company welcomes the government’s enforcement funding under Budget 2027 and will keep working with authorities and other parties on illicit trade. Neither source states the size of that allocation or when it applies.

Third-quarter profit was RM2.3 million on revenue of RM302 million

Quarterly revenue rose slightly from RM300.8 million a year earlier. Route-to-Market is the distribution model a manufacturer uses to move stock to retail outlets.

Hsu said the new model is live and that early benefits include higher sales-call productivity and more face-to-face contact with retailers. He listed sharper trade execution, distribution efficiency and fewer out-of-stock occurrences as current priorities.

For the first nine months of 2026, revenue fell to RM977.6 million from RM1.2 billion. The net loss narrowed to RM22.2 million from RM24.5 million in the first half. BAT Malaysia declared a third interim dividend of two sen per share, worth RM5.7 million in total, payable Dec. 28, 2026.

Licensed retailers carry the narrower taxed base

Shops and distributors selling taxed stock absorb the change first. On the company’s estimate, more than half of the cigarettes consumed in Malaysia sit outside the channel they supply.

BAT Malaysia faces pressure from both directions at once: the taxed market shrank 3.9%, and its own volume fell 21.1%. Retailers served under the new distribution model work from the same smaller taxed base.

The documents name no enforcement target, staffing figure or projected change in the illicit share once Budget 2027 measures take effect. The company’s estimate is attributed to BAT Malaysia and is not described as an independent survey in either source.

The next dated item is the dividend payment on Dec. 28, 2026. Whether the illicit share shifts once the Budget 2027 enforcement funding is in force is the open question the statement leaves.

Questions readers ask

What share of Malaysia's cigarette market is illicit?

BAT Malaysia put illicit cigarettes at 56% of total cigarette market volume as of July 2026. The company compared that with 56.2% in May 2026 and 54% at the end of 2025. The statement does not describe how the company compiles the estimate.

How much did BAT Malaysia's sales volume fall?

BAT Malaysia's sales volume fell 21.1%, while the legal cigarette market contracted 3.9%. The faster decline cut its market share by 1.9 percentage points, according to the company's third-quarter statement.

When is BAT Malaysia's dividend paid?

BAT Malaysia declared a third interim dividend of two sen per share, totalling RM5.7 million. The company stated the payment date as Dec. 28, 2026.