Tag: Pakistan Tobacco Co.

Illicit Trade Hurts PTC’s Sales

Image: Ali Sher
Competition from illicit tobacco products caused Pakistan Tobacco Co.’s (PTC) sales to drop by 11.26 percent in the first quarter of the current fiscal year as compared to 2023-2024.
“The legitimate tobacco industry in Pakistan faces continued challenges as illicit cigarette sales have reached alarming levels,” PTC’s senior regulatory affairs manager, Qasim Tariq, was quoted as saying by the Associated Press of Pakistan.
During the period under review, PTC sold 6.3 billion cigarettes, against 7.1 billion in the comparable 2023 quarter.
PTC is not the only organization impacted by illicit trade. In a recent statement to the Senate Standing Committee, the Federal Board of Revenue (FBR) revealed that 50 percent of cigarettes were being sold in Pakistan illegally, causing the government to miss out on much-needed tax revenue.
Tariq attributes the problem, in part, to excessive tobacco taxation levels. In February 2023, the government increased the Federal Excise Duty by more than 150 percent, driving many smokers to purchase their tobacco on the black market instead. “As a result, there is an estimated PKR300 billion loss to government revenue which is essential for public services, infrastructure and economic development initiatives,” he remarked.
While commending the FBR for its enforcement efforts against illicit tobacco trade, Tariq emphasized that isolated measures would not be enough to address the problem. He believes that the market for illicit products remains strong due the FBR’s limited resources and inconsistent enforcement at the retail level.
“PTC strongly advocates for the full and consistent implementation of a track-and-trace system in all regions, including Azad Jammu and Kashmir, to enable authorities to identify and monitor products, reduce tax evasion and ensure only legitimate products reach consumers,” he said.
November 13, 2024
PTC Risks Losing Sudan Small-Pack Order

Image: Maksym Kapliuk
Pakistan Tobacco Co. (PTC) may lose a large order from Sudan if the health ministry continues to drag its feet on the required regulatory approval, reports the Business Recorder.
Sudan has ordered $20.5 million worth of cigarettes, to be delivered in packets of 10 sticks of cigarettes each, from PTC. The sale of such packs is prohibited in Pakistan but allowed in Sudan.
Prime Minister Shehbaz Sharif has granted PTC’s request for an exemption of the small-pack prohibition for exports, but the Ministry of Health has failed to issue the required amendment in the statutory regulatory order.
Due to the delay, Sudan has now started contacting other countries to meet its domestic demand. A PTC official said that if Pakistan does not allow exporting cigarettes in small packets, the order may be shifted to Bangladesh or Indonesia.
PTC has been exporting cigarettes since 2019 and has so far earned $156 million, bringing much-needed hard currency into Pakistan. For the next fiscal year, the company is targeting $60 million in exports.
In the most recent fiscal year, the company paid PKR148 billion in federal excise duty and sales tax.
It’s not the first time PTC has lost business due to the small-pack restrictions. In 2019, the company lost an export order to the Gulf. At that time, the Ministry of Commerce had given permission for exports, but the Ministry of Health withheld approval.
July 20, 2024
Pakistan Urged to Block Small Pack Exports

Image: Maksym Kapliuk
The African Tobacco Control Alliance (ATCA) has urged Pakistan to prevent British American Tobacco from exporting cigarettes in packs of 10 sticks to Sudan, reports The Independent.
Pakistan prohibits the sale of cigarettes in such packs on its domestic market. BAT subsidiary Pakistan Tobacco Co. (PTC) has asked the government to make an exemption for a large order from Sudan, which permits the sale of 10-stick packs on its territory.
In its statement, the ATCA urged the Pakistani government to reject PTC’s request, emphasizing the need to protect children from the dangers of smoking.
According to the ATCA, the 20-cigarette per-pack rule is the global standard for the protection of children. Because packs with fewer than 20 cigarettes are less expensive, the argument goes, it is more likely that underage buyers will purchase them. The ATCA refers to such packs as “kiddie packs.”
At least 82 countries have laws requiring a minimum of 20 cigarettes a pack.
“BAT is pushing you to change regulations so that it can manufacture 10-stick cigarette packs and export them to Sudan, the ATCA wrote in its letter to the government of Pakistan. “However, the WHO Framework Convention on Tobacco Control in its Article 16 calls on parties to prohibit the sale of cigarettes in small packets, which increases the affordability of such products to minors. Consequently, Pakistan as a party to the convention should not allow manufacturing of 10-stick cigarette packs.”
The organization condemned BAT’s explanation that the 10-stick packs will be sold only in Sudan, noting that if the tobacco giant is allowed to succeed with this plan in Sudan, other African countries would be next. “It is unconscionable that BAT thinks it is ok to change a law on one continent in order to target vulnerable populations on another,” ATCA wrote.
“In Sudan and other countries in Africa, people need food, medicine and other lifesaving supports. What they do not need is kiddie packs of cigarettes that put them at increased risk of tobacco addiction, diseases and death. And we know that once BAT gets kiddie packs into one country, they will make their way across Africa.”
July 7, 2024
Pakistan Urged to OK Small Packs for Exports

Photo: Alexandr Byerdugin
Pakistan Tobacco Co. (PTC), a BAT subsidiary, is lobbying the Pakistan government to allow export of 10-piece cigarettes packs to Sudan, reports The Guardian. Pakistan is one of more than 80 countries that prohibits the sale or manufacture of 10-piece cigarette packs. Sudan, by contrast, permits such packs.
In a letter to the government, PTC said it “received a new export order to manufacture for Sudan, which includes packs of 10 cigarettes.”
PTC told the government that exempting export orders from the 10-cigaratte pack ban would benefit Pakistan as the order is worth $20.5 million and could be repeated.
Health activists urged the government to deny the request. “It is beyond shameful that British American Tobacco is seeking to alter the law in Pakistan so that it can flood an African country in crisis with cheap cigarettes,” said Mark Hurley, vice president of the Campaign for Tobacco-Free Kids. Sudan is currently in the midst of a civil war.
According to Hurley, over 80 countries have banned sales of small packs, requiring at least 20 cigarettes per pack, “because evidence shows these cheap packs are used to target kids and vulnerable populations.”
“Exploiting not only this knowledge but a country facing a humanitarian crisis is the behavior of a company that will truly stop at nothing to sell and addict more people to cigarettes,” he said.
BAT countered that the export order was intended to replace domestic manufacturing by its Sudanese subsidiary Blue Nile Cigarette Co. (BNCC), which is based in Madani, where there has been heavy fighting in the civil war.
“To ensure the continuity of products to meet consumer demands in Sudan, which predominantly operates in cigarette packs of 10, Pakistan was given the export order to supply to BNCC,” said a BAT spokesperson. “The clearance for the export order of cigarette packs of 10 from Pakistan to Sudan is pending regulatory approval by the government of Pakistan. The clearance complies with all local laws and regulations in Sudan.
“For any products manufactured by BAT, we abide by strict marketing principles to prevent marketing and sales to underage [consumers]. These measures include prominent 18-plus age warnings on packaging as well as our communications.”
June 11, 2024