Group supports BIR rule on cigarette firm’s bid to sell at low prices

MANILA, Philippines - The Philippine Council of Management (Philcoman), a non-political federation of professionals and technological societies, academe and business enterprises dedicated to the development and innovation of management practices of all aspects of Philippine society, has commended the decision of the Bureau of Internal Revenue (BIR) to reject the proposal of Philip Morris to sell four variants of its premium Marlboro cigarette at low prices.

“We commend the BIR for its alertness and steadfast implementation of Republic Act (RA) 10351, otherwise known as the Sin Tax Law, meant to level the playing field in taxation and protect local industries,” Dr. Benjamin Santos, Philcoman president, said in a letter of to Internal Revenue Commissioner Kim Henares.

PMFTC, the joint venture between taipan Lucio Tan and American tobacco giant Philip Morris International, made the proposal following stagnating sales with consumers switching from premium to super cheap cigarettes.

It lost a bit of control over a market it once dominated completely due to intense competition from low-priced brands like Mighty which sells cigarettes for P1 per stick.  This triggered a price war that dented the bottom-line and topline of PMFTC.

Last year, low-priced cigarettes accounted for only five percent of the country’s 100-billion cigarette sticks industry, estimated to be worth around P150 billion.