Despite the economic growth and upward tobacco cultivation, the industry has its challenges covering issues such as illicit cigarettes; rising taxes and government urge on restrain smoking. According to the Confederation of Malaysian Tobacco Manufacturers (CMTM), the occurrence of illegal cigarettes increased from 11.5% in 2004 to 36.3% in 2010. As a result, Malaysia is projected to be among the top three nations in Asia with a high level of illegal cigarettes with an estimated projection of 40.4% in 2014. Price range of there illegal cigarettes is from RM1.80 to RM3.20 per packet, depending on the brand.
In Malaysia, the tobacco industry has three main players – British American Tobacco (BAT), JT International and Philip Morris. The mentioned companies have a range of of brands to supply individual preferences. As at October 2012, the cigarette price ranges from RM7.00 per pack of 20 sticks to RM10. Thus, the local players have a high potential in breaking through the tobacco demand and supply as it is less competitively priced.