MANILA, Philippines - Global tobacco giant Philip Morris International reported a slight decline in shipment volume to the Philippines in the third quarter as low-priced brands continue to eat into its market share.
In a report to stockholders, PMI said shipments to the Philippines decreased by 1.7 percent to 17.5 billion units from July to September this year.
Despite the drop in shipment volume, the market share of PMI’s flagship brand Marlboro went up by 1.4 points to 16.8 percent as adult cigarette consumption remains stable. Its Fortune brand also saw its market share increase by 4.7 points to 32.4 percent.
PMI recorded a sharp fall in cigarette shipments to the Philippine market as price-conscious individuals shifted to cheaper brands to satisfy their nicotine craving.
PMI is hopeful that the launch of tax stamps on cigarette packs would address tobacco tax leakage and protect the country from illicit tobacco smuggling.
Based on a recent study done by Oxford Economics and International Tax and Investment Center (ITIC), the Philippines lost some P15.6 billion in revenues due to non-payment of correct taxes by cigarette manufacturers.
The same report showed that consumption of domestic illegal tobacco grew nearly three-fold to 17.1 billion last year.
The Philippines has become one of PMI’s most challenging markets in Asia. PMI suffered a 13-percent drop in its market share last year after the company raised taxes and Mighty held back its pricing.
PMI is a leading international tobacco company with its products sold in more than 180 countries worldwide. Excluding the US and China, the company holds more than 28 percent of the global cigarette market.