BAT eyes 3-fold hike in Phl cigarette sales

KUALA LUMPUR, Malaysia – London-based British American Tobacco (BAT) is looking at a three-fold increase in the number of sticks it will sell in the Philippines this year compared to 2009 when it decided to pull out of the country.

BAT Philippines head for corporate and regulatory affais Roberto Eugenio said the company is  looking at selling 150 million sticks after relaunching the Lucky Strike brand in the Philippines last February.

This is three times the 50 million sticks sold in 2009 before the company decided to pull out its Lucky Strike and Dunhill brands in the Philippines.

Eugenio said the company is looking at launching the Lucky Strike brand that is currently being sold in 7-11 convenence stores by the middle of the year.

He added that BAT is currently negotiating with other retailers including Puregold to carry the Lucky Strike brand.

According to Eugenio, BAT is supporting House Bill 5727 Rep. Joseph Emilio Abaya of Cavite that seeks to change the current multi-rate specific structure of the excise tax on tobacco and alcohol products by adopting a unitary rate and raise additional P60 billion for the government coffers.

The proposal seeks to shift to a much simpler structure by adopting a unitary rate which would address problems attendant to the current multi-rate specific structure of the excise tax like unfair tax treatment between and among tobacco and alcohol products.

The bill proposes a three-year transition period in unifying the tax rates on cigarettes and distilled spirits. The tax structure for fermented liquor will be immediately unified on the first year of the reform.

An essential feature of the bill, Abaya said, is the automatic adjustment of the tax rates using the relevant National Statistics Office-established tobacco and alcohol indexes. The adjustment would allow the specific rates to track inflation and maintain the buoyancy of the revenues from this source.

“It doesn’t mean imported products will get cheaper but it means that everything will be taxed. We just want it to be fair and level playing field and there should be no distinction between old brands and new brands,” he explained.

The country’s 100 billion stick cigarette market is dominated by the joint venture between Swiss-owned Philip Morris and Fortune Tobacco of tycoon Lucio Tan.