STMA Decides to Generalize System of Supply by Order in 2008

Source from:  Straits Tobacco News 12/19/2007

The State Tobacco Monopoly Administration (STMA) - the regulator of China's tobacco industry - held a national conference on coordination of cigarette production and sales in Beijing on November 22-23, adopting a decision to generalize application of the system of cigarette supply by order in the whole tobacco industry of China in 2008, on the basis of maintaining the system of State tobacco monopoly, in order to give better play to the role of the market mechanism and promote adoption of the market principle in the tobacco industry. According to the conference, application of the system of cigarette supply by order will be generalized in the whole tobacco industry of China on the basis of the operation of pilot projects to apply the system in 36 Chinese cities as key market areas on a trial basis, in efforts to establish a national single tobacco market, develop an environment of fair competition and promote the development of big competitive cigarette brands. The system of cigarette supply by order was introduced in 2005. The system was applied on a trial basis firstly in Shenzhen, Hangzhou and Dalian Cities and secondly in Shandong, Shanxi and Zhejiang Provinces before being extended to the 36 Chinese cities as key market areas. Since the beginning of 2007, the enterprises applying the system of cigarette supply by order have registered relatively high growth in cigarette sales, further improvement of the structure of cigarette products and relatively rapid development of big competitive cigarette brands. Enditem