Will the sin tax and the newly signed Republic Act 10643 or The Graphic Health Warning Bill—which mandates that 50% of the cigarette packaging should be devoted to the graphic warning—be the death of cigarettes in the country?
“Global tobacco giant Philip Morris International (PMI) suffered a sharp decline in cigarette shipment volume in the Philippines in the second quarter, hurt by intensifying price competition,” reports Zinnia B. Dela Peña in The Philippine Star.
According to the statement issued by PMI chief executive officer Andre Calantzopoulos, “shipments to the Philippines fell by 9.8 percent to 17.2 billion units in April to June this year.”
Then again, despite lower shipments, the report revealed that “the market share of PMI’s flagship Marlboro brand rose by 3.4 points to 18% as consumption levels remained resilient.”
Moreover, PMI’s Fortune brand likewise “saw an increase in its market share by 3.3 points to 35.9 percent.”
Nevertheless, PMI has one another issue on its plate.
The report noted: “PMI reported that total estimated tax-paid industry cigarette volumes decreased by 13.4 percent to 20.1 billion units. It attributed the decline to lower declaration of volume for excise tax purposes by the company’s main rival, Mighty Corp.”
PMI, as the report put it, “believes that Bulacan-based cigarette firm Mighty is underdeclaring its production, which is allowing it to sell at extremely low prices.”
The report pointed out from a mere 5% in 2012, Mighty’s market share surged to 20% last year as it “benefited from downtrading of consumers to low-end brands.”
Mighty has denied PMI’s allegations and has said that it’s paying the right taxes. It was reported last month that Mighty was being subjected to a Bureau of Internal Revenue (BIR) probe.
Photo from MorgueFile