Philip Morris Fortune Tobacco attacked over low-price plans for Philippines

A health group has lashed out Philip Morris Fortune Tobacco Corp. (PMFTC) over its plan to manufacture cheaper cigarettes to compete with a local brand, saying this would defeat the purpose of the ‘sin tax’ law, according to a story in the Philippine Daily Inquirer.

PMFTC has asked the Bureau of Internal Revenue (BIR) to allow the company to come up with cheaper versions of its leading brand Marlboro, so as to level the playing field against local brand Mighty.

“If you are going to allow other players to produce low-priced cigarettes to catch up with others, then smokers will just choose cheaper brands instead of quitting,” said Emer Rojas, president of the New Vois Association in a statement. “In the end you will not only perpetuate smoking but you are in fact promoting it.”

Rojas said the primary objective of the sin tax law, which was approved in December last year, had been to raise the prices of cigarettes so as to discourage smoking and help smokers quit.

In a letter to the BIR last month, PMFTC, the joint venture of multinational Philip Morris International and Fortune Tobacco, sought permission to manufacture four variants of its Marlboro products as low-priced cigarettes.

PMFTC argued that the sales of Marlboro had dropped significantly because smokers were choosing cheaper cigarettes, such as Mighty, as a result of the higher levies imposed on premium brands.

It said that in order for the company to regain its dominance of the market (90 per cent, according to Rojas) , the government had to allow it to come up with four low-priced variants of Marlboro.

According to a piece in The Philippine Star, PMFTC president Paul Riley told the BIR the company’s production volume had declined to 68 billion sticks this year from 92 billion in 2012, and that it expected a further decrease next year to 48 billion.