STMA Introduces “One-for-One” System for Cigarette Wholesale

Source from:  Hongyun Group 05/16/2006

The State Tobacco Monopoly Administration (STMA) - the watchdog of China's tobacco industry - has recently issued the Notice on Strengthening the Management of the Catalogue of Unified Cigarette Wholesale Prices, introducing the "one-for-one" system for cigarette wholesale. Under the "one-for-one" system, every time a commercial enterprise of the tobacco industry introduces a new cigarette specification or product to the market, it will have to withdraw an existing specification or product from the marketplace. According to the notice, the "one-for-one" system does not cover homemade cigars and imported cigarettes and cigars as well as key cigarette brands designated by the STMA. It provides that the wholesale prices of new cigarette specifications or products to be introduced to the market shall be subject to the approval of competent administrative authorities of the State for price control, and that any cigarette specifications or products to be withdrawn shall be declared specifically. The introduction of the "one-for-one" system is intended to strengthen the development of famous and high-quality cigarette brands, further strengthen control over the pricing of cigarette products and further improve the work of regional unification of wholesale prices of cigarette products, according to the notice. The STMA has instructed all provincial-level tobacco administrations to make arrangements for applying the "one-for-one" system in their respective regions in the near future. It has emphasized that no commercial enterprises of the tobacco industry may trade cigarette specifications or products whose pricing has not been approved by competent pricing control administrative authorities or whose pricing does not meet the requirement for unified pricing. Under China's tobacco monopoly law, cigarette products each have a bar code and are traded at nationally or regionally unified prices. Enditem