Philip Morris battling 'artificial shortage'
Feb 01, 2013 (Menafn - The Manila Times - McClatchy-Tribune Information Services via COMTEX) --SAN FERNANDO, La Union -- Tobacco giant Philip Morris Fortune Tobacco Corp. Inc. (PMFTC) said it would beef up coordination among retailers to address the issue of supply shortage, resulting from the implementation of new excise tax law.
In an interview, PMFTC President Chris Nelson said that the company hopes to address disruptions in supply by coordinating with retailers that are directly affected the "artificial shortage," as people start to speculate about the prices of cigarettes.
"Our first priority is on the sale said . . . that adult consumers will continue to buy our brands. If we have to go to places that don't have supply, then we will do it," he added.
Earlier reports told that unscrupulous traders and speculators began to hoard cigarettes between Christmas and New Year--prior to issuance of the implementing rules and regulations for the newly signed sin tax law.
Nelson admitted that the tight supply resulted to higher prices of cigarettes in the market, affecting retail sales. At present, the retail sector (a stick) accounts to about 70 percent of the total cigarettes sales in the country.
But he stressed that the artificial shortage did not come from the company, noting that they continue to provide the right volume to the market.
"From our side, we are supplying the market right. We just need to meet more retailers as possible and encourage them to be compliant to the suggested price list," he said.
On January 7, PMFTC issued to its trading partners the official price list of cigarettes, incorporating the new excise tax law. It also stressed that "there is now an urgent need to follow the maximum recommended retail selling price [RRSP]" to motivate your regular adult consumers to continue patronizing their brands.
With the RRSP, PMFTC's trade partners would still "maintain good margins" and can "increase foot traffic" to their stores.
PMFTC said that the recommended retail selling price a stick effective January 7 is: P3 for Marlboro and Philip Morris; P2 for Fortune Tribal; P1.50 for Fortune soft; P1.25 for Champion; and P1 for Jackpot and Westpoint.
In the official price list that PMFTC sent to trade partners, the wholesale price per carton or ream of the more premium brands Marlboro red and Marlboro Lights soft pack is P500 (up from P308) and the price to trade is P501 or a P1 markup. The same would cost P51 a pack at retail.
Meanwhile, more popular brands like Hope and Champion now cost P39 and P42 a pack at retail, respectively and a stick at P2 and P2.25, respectively. The cheapest among the PMFTC brands, Boss, now retails at P24.50 a pack and P1.50 per stick.
___ (c)2013 The Manila Times (Manila, Philippines) Visit The Manila Times
(Manila, Philippines) at www.manilatimes.net Distributed by MCT Information
Copyright (C) 2013, The Manila Times, Philippines