Share of taxed cigarettes down in 2014

MANILA, Philippines - The share of taxed cigarettes in the Philippines declined last year due to the proliferation of untaxed products, a leading tobacco firm said.

In its quarterly report, global tobacco giant Philip Morris said that in the Philippines, the estimated total tax-paid industry cigarette volume fell 4.6 percent to about 82.3 billion units last year, reflecting the prevalence of domestic non-duty paid products.

PMI said while its shipment volume decreased by 0.2 percent to 68.4 billion units, its  share of the estimated total tax-paid cigarette industry rose by 3.7 points to 83 percent.

The market share of its Marlboro brand increased by 1.7 points to 18.4 percent while Fortune’s market share improved by 1.8 points to 33.4 percent.

In the fourth quarter of 2014, alone, the  estimated total tax-paid industry cigarette volumes fell by 12.9 percent to 21.8 billion units, reflecting a higher incidence of non-tax-paid volume.

Despite a 3.3 percent drop in its  shipment volume in the fourth quarter,  PMI’s market share of the tax-paid market went up by eight points to 80.3 percent.

Marlboro’s market share improved by 2.4 points to 19.3 percent while Fortune saw its market share rise by 4.8 points to 31.5 percent.

PMI chief executive officer André Calantzopoulos said the company remains upbeat about its prospects in the Philippines despite lackluster sales.

“While the Philippines continued to be a challenge and a drain on our 2014 income performance, we have recently witnessed significant positive price movements at the lower end of the market,” Calantzopoulos said.

According to Calantzopoulos after PMI raised the stick price of its low-end brand Jackpot to P1.50 in October,  its main rival, Mighty Corp.,  followed suit, increasing its brands by P0.25 in December.  Further price increases were implemented by its competitor since then.