West Indian Tobacco Company Raise Cigarette Prices Again

Source from:  Trinidad Express  10/14/2014

The West Indian Tobacco Company (Witco) has increased the cost of its cigarettes for yet another year. Effective yesterday smokers had to pay as much as $4 more for certain brands.

According to the new price scheme the Dunhill Fine Cut pack of 20 cigarettes (Switch and Release) is now $32, up from $28.

The regular Dunhill Red, Green and Blue packs of 20 have been increased from $23 to $27 while the Dunhill Red pack of 10 cigarettes jumped from $13 to $15.

Consumers must also now pay $25 for the Du Maurier Red, Green and Blue packs of 20 cigarettes. The previous price for that brand was $21. The Du Maurier Red pack of ten went up from $12 to $14.

The Broadway Red pack of 20 cigrattes is now $22, up from $19 while the Broadway Red pack of ten now cost $13, up from $11.

Similar to last year, Witco's managing director Jean Pierre du Coudray cited the rising cost of tobacco on the international market as the reason for the price increases.

"The type of tobacco that we use in Trinidad is Virgina Tobacco which is one of the more premium tobaccos in the world. I won't say there is a shortage of it but it is a commodity item and the price, like any other commodity, is driven by demand and supply. Right now the demand is pretty high and there isn't a lot of supply to go around. Once you have a situation like that the price tends to go up," he explained to the Express.

He added that Witco had little choice but to pass on part of this cost to its consumers.

Du Coudray noted that the company is also starting to feel the effects of the new requirements of the Tobacco Regulations, which kick in from the first quarter of next year.

He said under the regulations, each brand of cigarette will need to have 12 different packages to accommodate the 12 new graphic health warnings that have been approved.

"The warnings consists of 12 different images. So the Du Maurier brand will now have 12 different packs, with each one having its own warning image. There will also be 12 packs of Dunhill with each one having a different image and so it will be for the Broadway brand," he said.

Du Coudray described the cost of that packaging transition as "huge".

"Whereas before we could go to a supplier and order Du Maurier with one pack and image, we now have to order it in 12 different images so we lose volume and we lose leverage of getting the best pricing for our packages," he added.

Asked whether he thought the price increases will result in a drop in sales, the Witco head said he hoped the quality of the company's products will cause consumers to continue to purchase them.

"I know that even with these increases if you compare it regionally, the price of a pack of cigarette in Trinidad is quite reasonable. Anybody travelling to Miami trying to buy a pack of cigarettes will see that they will have to pay close to US$10, whereas Dunhill locally is going up to $27, still reasonably competitive," said.

Du Coudray said last year when cigarette prices increased there was "interestingly" no decrease in the purchase of premium brands like Dunhill and Du Maurier but there was a drop in the purchase of Broadway.

"People were beginning to experiment with some of the cheap Chinese brands and the low-priced brands on the market. What we saw were people leaving Broadway for a while and going to these cheap brands but after they compared them to Broadway, many of them came back. If there is any impact on the volume (of cigarettes) at all it will be at the bottom level, which is Broadway." Enditem