Philippines: Mighty Competition in Tobacco North

Source from:  Manila Bulletin  12/16/2013

More farmers in Pangasinan, Ilocos provinces, and the Cagayan Valley region are seen to increase their incomes as Mighty Corporation assured them that as a new major player in the tobacco industry will be buying more tobacco leaves in 2014.

"It is high time true competition can now happen in the tobacco industry with prices being dictated in the past by a monopoly imposed by the merger of the two giants in domestic cigarette manufacturing," said Ernesto Calindas, president of the National Federation of Tobacco Growers and Cooperatives Inc.

The statement was made by Calindas after Mighty Corporation Executive Vice President Oscar P. Barrientos said that the Filipino-owned cigarette manufacturer will buy more tobacco leaves in 2014 from farmers in Regions 1 and 2.

Looking back to the previous year, the local tobacco industry had only one outlet for Virginia and burley tobacco leaves used for cigarette manufacturing, and another buyer for export-quality leaves.

"Under those circumstances, we had to sell dried tobacco at prices the buyers offered without any other option to sell to a serious competitor," explained Calindas, adding that Mighty Corporation has been the anchor of tobacco farmers in the sale of their low-grade tobacco leaves.

The prices were fixed at a range of P45 a kilo for the low-end leaves to P80 for top quality leaves," he recalled.

"This time we have greater assurance and more reasonable pricing will be now expected with Mighty Corporation's announcement that it will buy more tobacco leaves in 2014," Calindas said.

Mighty Corporation hogged the limelight recently when established competitors sought a congressional investigation over its sudden rise as a tobacco player, eating up the markets of previously low-priced cigarettes with brands identified with Philippine Morris Fortune Tobacco Corporation (PMFTC).

From a minimal five percent share of the domestic market, Mighty Corporation cigarettes zoomed to corner 20 percent in less than a year since the new tobacco sin tax took into effect in 2013.

Company officials asserted that reasonably priced quality products, smartly packaged and creatively sold were behind the all-Filipino company's success. Enditem