British American Tobacco Returns to Philippines

Published on March 23rd, 2012 00:00

British American Tobacco, producer of famousLucky Strike cigarettes is announcing a return in the Philippines. The company departed of the local market approximately 4 years ago after an unsuccessful taxation case at the Supreme Court, which it stated would have equalized the playing filed in the local tobacco market.

At present, British American Tobacco decided to return as it supposes that Aquino government will introduce the reforms in struggled for in 2008. “With the modifications in administration, quite resolute signals from the Aquino government that excise duty reform is the main objective, the company made a decision to postpone that withdrawal and return in full force,” stated James Lafferty, chief manager of British American Tobacco Philippines.


British American Tobacco was struggling against a law that introduced higher taxes on tobacco products that appeared in the market after 1996. That meant increased taxes for such cigarette brand as Lucky Strike, which was launched in 2001 and lower tax for its competitors respectively. Mr. Lafferty declared that the advised increase in excise duties on smoking products, which is pending in Congress, will make it easier for them to compete. “The main concept that is essential to us is the level-playing field. It doesn’t matter how we will resolve the level playing field. There is one possible way which states that all cigarettes will pay similar excise tax. That is a very disputable point, that has a single tier and it s one method to resolve it. I just want to start doing something in this direction. At present, we have a system that captures the market and permits only one company to efficiently compete objectively,” he said.

Philip Morris Fortune Tobacco that currently controls about 90% of the market is against new regulations. It declares that new taxes won’t fulfill the government’s objective of increasing profits or decreasing smoking rate. British American Tobacco has opposing opinion. “Who could be against a level-playing field? I think the only person who can be against it is that who has some advantages from the monopoly,” Lafferty stated.

Lucky Strike has already returned to the market and has been available for purchase for more than a week. However cigarettes are mostly imported from Malaysia. “We plan to invest only in factories here, after President Aquino will make Philippines more business-related,” Lafferty concluded.

By Kevin Lawson, Staff Writer. Copyright © 2012 All rights reserved.

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