Mighty little market impact

Japan Tobacco Inc.’s acquisition of Mighty Corporation will not change the cigarette market in the Philippines significantly, according to a story in The Philippine Star quoting the Philippine Competition Commission (PCC).

Post-acquisition, JTI Philippines’ market share in the low-end segment will increase from one percent to 51 percent, said PCC commissioner Stella Luz Quimbo.

But this was because, pre-merger, Mighty held 50 percent and JTI held one percent.

Quimbo was quoted as saying that the PCC had approved the acquisition because it had decided it would have no significant impact on the market.

At the same time, she said, the acquisition made JTI a stronger player against the market leader PMFTC, the partnership between Philip Morris and Lucio Tan’s Fortune Tobacco, and this made the cigarette market more competitive.

Before the acquisition, PMFTC had a 71 percent share of the overall market, while Mighty held a 23 percent share and JTI a 4.2 percent share.

JT was said to have acquired Mighty from the Wongchuking family for P46.8 billion, heralding a new era in the local cigarette industry in which multinational cigarette companies were the dominant players.