BAT Still Optimistic on Even Level Playing Field for Tobacco Products

Source from:  Manila Times 03/07/2012

THE world's most international tobacco group is still optimistic on pursuing investments in the Philippines despite the difficulties it is encountering in getting a level playing in the local tobacco industry. "We are back because of the change in administration. They said they were serious. We are very satisfied with the Aquino administration which is committed to change. We are optimistic in this country that this change will come, but we are also very cautious," said James Lafferty, the new general manager of British American Tobacco (BAT), in a recent interview. "We are committed for the long-term. We are talking to the government, but so far there is still no commitment to level the playing field," he added. BAT is prepared to challenge cigarette giant Philip Morris and Fortune Tobacco Corp. (PMFTC), which currently controls 90 percent of the Philippine market. The company is the world's second-largest quoted tobacco company by market share (after Philip Morris International), and has a leading position in over 50 countries and operations in more than 180 countries. "Right now, even if we are not yet producing, we are putting up a new office and hiring new people. These are jobs that were non-existent before," Lafferty said. BAT owns the Dunhill, Lucky Strike and Vogue cigarette brands. It supports raising excise taxes on alcohol and cigarettes, saying that this would allow new players to compete in the Philippine cigarette market. At present, old brands such as those under PMFTC, are enjoying a preferential tax treatment by paying only P12 excise tax for every P32 pack of cigarette. The tax was granted to tobacco firms which have been operating in country before 1996. For tobacco companies that came in only after 1996 like BAT, the government imposes an excise tax of P28.30 per pack even if their products are selling at P32 per pack. Enditem