Tax-paid Cigarette Volume Decline in Q3 – PMI

Source from:  Manila Bulletin  10/20/2014

The volume of tax-paid cigarettes in the Philippines declined in the third-quarter of the year despite an increase in adult smoking incidence and average daily consumption during the period, a dominant tobacco company said.

In its third-quarter report, Philip Morris International (PMI) reported that tax paid cigarette industry volume dropped by 3.2 percent in the third-quarter due to continued production under-declaration by one local cigarette firm.

The decline in legal cigarette output comes amid increase in adult smoking incidence in the first eight-months of the year to 50.2 percent from 49.8 percent in the same period a year ago, PMI report showed.

On the other hand, average adult daily consumption in the Philippines grew to 13.1 sticks in January to August from 12.6 stick a year ago.
Jacek Olczak, PMI chief financial officer, has alleged that another cigarette manufacturer still continues to under-declare its sales volume.

Earlier, the Bureau of Internal Revenue (BIR) reported that volume of total cigarette removals at local manufacturing facilities reached 1.47 billion packs in the January to June this year, higher by 2.8 percent compared with 1.43 billion the same period last year.

PMI, meanwhile, reported that its market share in the tax paid tobacco industry slightly increased to 85.3 percent in the first seven months of the year from 83.6 percent in the same period in  2013.

At end-July, Fortune-brand cigarette controls 34.4 percent of the legal domestic market, while the Marlboro brand accounts for about 18.5 percent.

Fortune's market share dropped from 35.5 percent a year ago, while Marlboro's share improved from 17.1 percent.

According to the report by London-based Oxford Economics, total illicit cigarette consumption in the Philippines tripled last year to 19.1 billion sticks from only 6.3 billion in a year before, while legal consumption fell to 86.3 billion from 102.2 billion sticks.

The report also revealed that consumption of domestic illegal tobacco nearly tripled from 6.1 billion in 2012 to 17.1 billion last year. Enditem