CTC to Slash Prices

Source from:  dailynews.lk Ravi Ladduwahetty 19 August 2008  08/19/2008

Ceylon Tobacco Co. PLC will reduce the prices of its premium brands making it the first time in the history of the company to reduce prices. The price of a particular brand which stood at Rs. 17 will come down to Rs. 16 per stick. The packet of 20 for both these brands will remain in the market. The reason for the price decrease is to increase the market share of these brands which have a collective market share of 0.5% while also considering the reasons of affordability, CTC's Marketing Director Rajiv Herath-Meewakkala told Daily News Business yesterday. The CTC Marketing Director explained that the company was allowing the stocks in the market to finish and then release the price reduced product on August 25 and September 1 respectively. The decision of the company to allow the existing stocks to sell out was that the dealers would lose out on the pricing if the company reduced the prices now where the existing stocks were bought at the increased prices. He also refuted market speculation that the company was to imminently stop the production of the two premium brands imminently. This will also be the first time in its history that CTC will reduce the prices of its products. Responding to a question as to whether CTC was still maintaining the sales volumes of the standard 15 million sticks a day, he was tight lipped on the statistics. However, he conceded that that was a 3.5% to 4% Year- On- Year (YoY) decline in the consumption due to Government regulations and also consumers who either stopped or reduced due to health and financial reasons. He also explained that the price reduction was not going to make a significant impact on the CTC bottomline as the volumes were insignificantly small. There was not going to be any technical adjustments to the CTC's Sri Ramanathan Mawatha factory to accommodate the adjustments as well, he said. Analysts said this is due to the Government policy that was introduced to discourage use of alcohol and tobacco. Enditem