TTL Hikes Cigarette Prices by NT$5 A Pack in Surprise Move

Source from:  China Post 03/19/2012

The China Post news staff--State-run Taiwan Tobacco & Liquor Corp. (TTL) unexpectedly hiked its tobacco prices by NT$5 per pack to reflect increased costs, effective 12:00 a.m. yesterday. TTL sent a sudden notification to all its distributors around the nation Tuesday evening to raise retail prices for all its tobacco products at midnight, with the exception for three cigarette brands bearing low market shares in Taiwan. The TTL didn't relay the price-hike message to news media beforehand, and TTL executives told reporters later that if the company announced the price hike in advance, distributors or consumers might rush to hoard tobacco products, eventually leading to market volatility and a supply shortage. The executives continued that the price hike was necessitated by the sharp increase in tobacco leaf production cost and the fact that an extra charge of NT$1 per pack is needed to comply with the government policy of expanding the business tax base. Although a state-run concern, the TTL can hardly afford the increased costs, and therefore has to raise its tobacco prices, the executives said, adding that the company suffered a loss of NT$1.1 billion last year for failing to hike tobacco sales prices to offset the heavier costs. Enditem