Filipino Cigarette Firm Defends Market

Source from:  Manila Bulletin 11/19/2013

Retired Judge Oscar P. Barrientos, Executive Vice President and spokesman of Filipino-owned Mighty Corporation (MC), yesterday debunked as malicious and damaging the persistent demolition job in the media on its company by a giant multinational cigarette manufacturer.

Asked what could be the reason for those whom he considered giant in the tobacco industry suddenly ganging up on MC, Barrientos said:

"Actually, it's the least of our concern. But, knowing how the tobacco industry in the country has been regarded as a strong lobby group before our legislators, I will not be surprised if it turns out later that the giants simply wanted a whipping boy with which they can be noticed of and invite the attention of Congress to have the "sin tax" law amended. And, they're doing it on us, knowing that we're small, a purely Filipino company with no global presence, not influential in governance and they can do anything at will. This is typically an attitude of a bully.

"As we said, we're a small company. We've been that way since 1940s. We're very Filipino. We produced La Campanilla, Magkaibigan, La Campana Ringing Bell and other local brands which were totally and truly Filipino. We have no foreign brands, no royalty to remit to foreign headquarters, no foreign consultants. We kept our costs low. We have no influence; we simply pay taxes to our government. So, we can only wish it is amended; as they say, 'we can only hope for the best, but we should prepare for the worst.' Fortunately for us, the foreign brands did not do their homework, much as we did ours."

Barrientos said consistent with MC's nationalist bias, even when the sin tax law was just looming in the horizon, its competitive intelligence and business war-games already told that MC should brace itself for the next battle ground which is the low-priced tobacco market.

"Not a stranger in the "low-priced" cigarettes business, it was not hard for it to solidify its base, enhance its core competencies, and work out on its forecasts — migration of a big chunk of smokers from the premium to three choices: (1) quit smoking, (2) smoke less frequently or (3) look for low-priced alternatives," Barrientos said.

"We're aware of our strength - we are No.1 in the "low-priced alternatives," we just have to protect our base and the best way to protect our base is to keep on improving on our quality - that, we did. You try our new low-priced ones; you'll like it even more, especially when you're a nationalist who patronizes Filipino-manufactured products," he said, adding that "the competition has very high costs, they need very high profit; we incurred low costs, we're satisfied with low profits after what's due our government."

On the competition's charges that MC may have committed fraud, Barrientos said fraud is a serious offense and as such, it should be proven by complete evidence, adduced in an impartial investigation, conducted by a competent authority, with due regard to the due process requirement.

Under existing jurisprudence, Barrientos said, fraud is not to be presumed, it should be actual. Imputing fraud against MC is not only unfair but highly libelous and damaging. Under the law, good faith is presumed, bad faith is not. Customs authorities have been closely monitoring MC operations, reporting and compliance. They found nothing wrong. These findings of government offices enjoy the presumption of regularity of official functions.

How about the charge of undervaluation?There is no basis to the charge." Barrientos explained that undervaluation happens when one willfully and deliberately declares a lower value of his imported commodity than what was actually paid or made payable as agreed upon by and between him and the seller. This is clear under the GATT/WTO Uruguay Round with which the Philippines is a signatory state. Enditem