Cigarette manufacturers Mighty Corporation or Mighty Corp and foreign firm Philip Morris-Fortune Tobacco Corporation (PMFTC) are now engaged in a price war.
The sales volume of PMFTC’s Marlboro brand significantly went down after the implementation of the new SIN tax law which resulted to the down-trading of consumers to low-end cigarette brands currently dominated by Filipino-owned Mighty Corporation that sells its cigarettes for only 1.00 per stick.
PMFTC requested the Bureau of Internal Revenue (BIR) to allow Marlboro to sell low-end cigarettes under the same brand.
Mighty Corp Executive Vice President, Retired Judge Oscar P. Barrientos said that he finds it quite suspicious that PMFTC is registering four Php1.00 per stick Marlboro brands all along in light of their accusations that Mighty Corporation cannot make honest profit out of their one-peso-per-stick cigarettes.
“Strangely, PMFTC engaged us in a bitter price war, accusing us of technical smuggling, tax evasion, and unfair competition based on a questionable research by AC Nielsen while they probably had the ulterior motive to completely take us out of the picture when they introduced their new low-priced Marlboro Brands while demonizing us in the media at the same time.” Barrientos said.
Barrientos also finds it alarming that foreign company Philip Morris, through their highly classified merger with Fortune Tobacco Company last 2010, acquired six low-priced cigarettes brands and asked, “What is the need to produce four new brands when you already have low-priced brands to begin with?”
Barrientos said that based on the PMFTC letter to the BIR, more questions about their highly classified deal have surfaced. One relevant issue that PMFTC should answer according to Barrientos is the speculation that they plan to kill the Fortune brand and revert back to Philip Morris Philippines Inc. to completely monopolize the Philippine tobacco industry like what it did in many countries.