Foreign firms in talks with cigarette maker Mighty Corp

London-based British American Tobacco  (BAT) is biding its time on exploring partnership options as its low-tier Pall Mall brand continues to puff up sales.

BAT Philippines general manager James Lafferty said while the company is in no hurry to enter into partnerships on joint venture, it is open to anything that will benefit them.

Lafferty admitted they had engaged in talks with rival firm Bulacan-based Mighty Corp. but no agreement had been reached. “We held some informal talks but there’s nothing to disclose because no agreement has been signed.  We’re open to working with other companies especially if its going to be beneficial to us.”

Forging into partnerships is just among the options BAT is considering to improve its market share, which currently stands at a mere one percent.

“We have a lot of options especially with the coming Asean economic integration. But that does not preclude us from entering into partnerships,” Lafferty pointed out.

He said business has been booming, mainly driven by the strong demand for its Pall Mall cigarettes to the extent that it is experiencing low inventory more people are shifting to this brand.

Pall Mall Boost and Pall Mall Switch are now two of the fastest-growing brands in convenience stores, allowing BAT to capture around 10 percent of the low-tier cigarette market.

BAT is currently the smallest player in the Philippine tobacco market, which is dominated by Philip Morris Fortune Tobacco Corp. (PMFTC), the joint venture between global giant Philip Morris and taipan Lucio Tan’s Fortune Tobacco.

PMFTC has approximately 71 percent share of the local market while its closest rival Mighty Corp. holds around 20 percent. Other major tobacco players include Japan Tobacco International (2.6 percent), La Suerte Cigar and Cigarette Factory Inc. and Anglo American.

Mighty Corp announced new premium brands

Expect competition in the local tobacco industry to heat up.

Mighty Corp., the oldest Filipino-owned tobacco company, has launched its premium brands King and Chelsea in a bid to firm up its position as the country’s second-biggest cigarette manufacturer.

“Our decision to enter the premium brand segment is part of the company’s thrust to reposition our brands and expand our reach into all segments of the market,” Oscar P. Barrientos, Mighty executive vice president, said.

“We hope to extend the reach of Mighty Corp. and strengthen our position as the top Filipino-owned tobacco company in the Philippines,” Barrientos added.

He said that both brands are premium in terms of smoke character. “But from the packaging and cigarette design, King is more traditional while Chelsea radiates unconventionality,” he explained.

The two premium brands are blended with the finest tobacco grades to give off a balanced taste and aroma. Both come in full flavor king size, lights king size and menthol 100s or a total of six different variants.

“One of our advantages is the smell, flavor and aromatic taste of our cigarettes that are also exceptionally smooth, mellow and attractively packaged,” Barrientos, a retired RTC judge, said.

Mighty’s premium brands will be categorized in the highest tax bracket for cigarettes.

“Our decision to expand our product lines is just part of our vision to become a major player in the market and show what a Filipino company can do,” Barrientos said.

The company was established in 1945 by businessman Wong Chu King with a small factory in Manila producing native cigarettes known as “Matamis.”

The company was renamed Mighty Corp. in 1985 and bought the trademarks of Alhambra Industries in 1993. It now operates a nine-hectare fully integrated manufacturing and processing plant in Malolos, Bulacan.

Mighty Corp. was able to build up its market share through an aggressive marketing push and heavy investments in research, development and production.

Mighty Corp workers completed training

Thirty people, including 17 from local tobacco manufacturer Mighty Corp., have completed a proficiency-training seminar conducted by American experts on tobacco leaf utilization, leaf chemistry and leaf purchases.
The seminar, jointly conducted by MC and American Tobacco Associates (TA) Inc., also trained the participants on the US Leaf Standards Grading System for both Burley and flue-cured tobacco developed by the US tobacco industry in the early 1900s.
Bobby Wellons, tobacco training specialist from the US Department of Agriculture (USDA) conducted the US Leaf Standards Seminar on Burley and flue-cured together with TA’s vice president, Hank Mozingo.
According to retired Gen. Edilberto Adan, MC president, understanding leaf tobacco grading standards provides the foundation for learning and appreciating tobacco qualities and characteristics in the Philippines.
“More specifically,” he said, “the seminars helped those directly involved in tobacco manufacturing gain a better understanding of the unique characteristics of each US tobacco grade and which grades are more suitable for specific blend needs.”     
While MC provided all the necessary on-site assistance and essentials, the TA group supplied all tobacco samples and training materials. 
The short but comprehensive course was conducted at the new MC facility (Pavilion) located inside the factory grounds.  
Aside from the MC participants, the others came from the National Tobacco Administration, Universal Leaf Philippines, Trans-Manila Inc., Continental Leaf, Prudence and WCD. 
The first two days of the seminar focused on the Burley tobacco grades and characteristics. The remaining three days covered flue-cured. 
At the end of the training course, each participant received a certification from USDA for completing the program.
Overall, the tobacco grading seminar has successfully served its purpose, providing participants with a deeper and a more extensive knowledge on the different sectors of the tobacco industry.

Mighty Corp, charitable arm gave donation to Yolanda victims

The Wong Chu King Foundation (WCKF), a philanthropic non-government organization providing assistance to poor and underprivileged sectors, has donated more than P4-million benefitting directly and indirectly hundreds of victims of super-typhoon Yolanda in Leyte, Cebu, Iloilo and Capiz.

Camille Arsenal, WCKF coordinator, said the foundation’s board of directors led by its chairman, Nelia Wong Chu King, approved the release of the funds to the victims, including 78 employees of Filipino cigarette manufacturer Mighty Corp (MC) and their dependents whose homes were either totally or partially destroyed by the typhoon.

“WCKF did not think twice after learning of the extent of the disaster. The victims were given enough funds to enable them to pick up the pieces and recover from the disaster,” Arsenal said.

“We treat our employees like family,” explains Mrs. Wong Chu King, whose foundation is MC’s corporate social responsibility arm.

Yolanda, the most powerful tropical cyclone to hit the Philippines last year, slammed the country on November 8 and barrelled through most of the Visayas, leaving a trail of devastation in its wake.

The latest from the National Disaster Risk Reduction and Management Council lists at least 5,209 killed, 23,404 injured and 1,611 missing, but government updating of  figures on the disaster remains unfinished. Initial estimates placed the death count at 10,000.

Created in 1990, WCKF aims to perpetuate the memory of Wong Chu King, the family patriarch, a philanthropist who had provided assistance to the poor and underprivileged in his lifetime.

The foundation also aims to encourage and promote education through scholarship programs and raise funds for charitable, cultural and educational purposes.

On tobacco dust and Mighty Corp

Local cigarette manufacturer Mighty Corp. said it will donate tobacco dust, a fish pond conditioner that protects local ponds from predators, to help millions of Filipino fish pond owners and operators as well as tobacco farmers nationwide.

“We are going to help the National Tobacco Administration promote the use of tobacco dust by donating to our thousands of fish pond owners and operators all over the country,” Mighty Corp. executive vice president Oscar Barrientos said in a statement.

“In doing so, we are helping both tobacco farmers and fish pond owners and operators increase their yield,” he said, adding the company previously sold tobacco dust to fish pond owners and operators.

Barrientos said the NTA was promoting tobacco dust to control the population of snails and other fish pond predators, as this was “an effective and economic option to replace highly toxic and cyanide-based chemicals used in the preparation or sterilization of fishponds.”

He said the cigarette company aimed to increase the income of the tobacco-growing industry by buying 10 million tobacco leaves from local farmers all over the country.  It allotted P700,000 for the purchase of green leaves.

The NTA manufactures Tobacco Dust Plus at a plant in Sto. Tomas, La Union, where leaves are re-dried and pulverized.

The dust promotes the growth of lablab, an algae and natural fish food, and serves as pond floor conditioner. Pond owners and operators use it to prepare or sterilize fish ponds before stocking fingerlings there.

Fish stocking is the practice of raising fish in a hatchery and releasing them into a river, lake, or the ocean to supplement existing population, or to create a population where none exists.

Studies by a team from the Southeast Asian Fisheries Development Center in Tigbauan, Iloilo under Joebert Toledo had confirmed the tobacco dust efficacy.

Other studies headed by the government agency showed promising results from the use of tobacco dust as a substitute to chemical fish pond fertilizers.

Mighty aims to help local tobacco farmers earn more with a projected increase in the production of tobacco leaves and tobacco dust while helping pond owners and operators and the environment as well. 

Mighty Corp celebrates its 69th anniversary

Mighty Corp. (MC), the Philippines’ oldest cigarette maker, recently marked its 69th anniversary, drawing praises and congratulatory messages from some of the country’s leading firms and personalities as it vowed to buy more local tobacco for its expanding product line. 
Executive vice president Oscar Barrientos said the company is looking to export local blended and expanded tobacco. “We are working closely with local farmers and our local tobacco suppliers in planning and implementing our expansion programs,” he said.
Meanwhile, Mighty’s contigency is now fully activated to meet the smooth implementation of the new cigarette tax system it drew up as early as six months ago in anticipation of its final approval by the finance department upon the recommendation of the BIR,” Barrientos said.
The BIR has just released Revenue Regulation No. 7-2014 which imposes the affixture of Internal Revenue Stamps on imported and locally-manufactured cigarettes as well as the use of the IRSIS for the ordering, distribution and monitoring of tobacco manufacturers.
The re-launching of the company’s oldest and flagship brands, La Campana Ringing Bell and Alhambra cigarettes, known traditionally as “Matamis” and “Regaliz” blend lines, re-engineered and reblended to cater to today’s consumers, also highlighted MC’s remarkable years in business.
The company, which produces non-premium brands, had earlier launched two types in the premium category: King and Chelsea. These two brands are now categorized in the highest tax bracket for cigarettes.
“We hope to extend the reach of Mighty and strengthen our position as the top Filipino-owned tobacco company in the Philippines,” Barrientos said.
The company was established in 1945 as La Campana Fabrica de Tabacos, Inc. by Wong Chu King and started out with a small cigarette factory in Manila producing native cigarettes known as “matamis.” A second factory was built in Pasong Tamo, Makati in 1948.
A facility for tobacco threshing and redrying was constructed in 1963 in Malolos, Bulacan where the company’s present-day nine-hectare fully integrated manufacturing and processing plant is located.
Malolos Bishop Jose Oliveros celebrated a Holy Mass to commemorate Mighty’s anniversary as well as its primary and tobacco expansion facilities.
“As you gather as one family, I adhere to all of you to contemplate deeper on the face of Jesus Christ and reflect the mission of love,” Bishop Oliveros said.
Archbishop Emeritus of Manila Gaudencio Rosales enjoined Mighty and the Wongchuking family for the services they have extended to many small and large communities all over the country.
“Their social and philantrophic outreach have even gone farther than their products,” he added.
Archbishop of Caceres Rolando Tria Tirona cited Mighty for its growth as a successful company and for extending services through the various socio-economic and religious programs and activities to Filipinos.
“Mighty’s commendable efforts to reach out to people expressed social responsibility that is important to bring about change in our society,” he said.
Bulacan Gov. Wilhelmino Sy-Alvarado congratulated Mighty on its 69 years of remaining steadfast in its commitment to nation building and seeking solution to the current economic quandary.
“The company’s success didn’t just happen overnight. There had been hard work, diligence and competitive spirit of each member of this company,” the governor said.
His wife, Rep. Ma. Victoria Sy-Alvarado of the 1st district of Bulacan, said: “Mighty’s success is considered phenomenal and inspiring. It first became popular as a producer of native cigarettes but transformed into a major player in the low-priced cigarettes.”
“Not only that. Through the years, Mighty has lived up to its corporate social responsibility by being an active and dedicated partner of the government from the private sector in nation building and development,” she said.
Malolos Mayor Christian Natividad gave a poetic message saying: “It’s doing your job the best you can and being just to your fellow man. Looking forward and thinking high while making labor a brave romance. Success is serving, striving through strain and stress, it’s doing your noblest — that’s success.”
“Mighty has always been a good partner to our city and I am so proud of your success in doing business with us,h he added.
Vice Mayor Jonathan Sy-Alvarado of Lingkod Movement said gas one of your partners in providing public service to our people, I am also one with you in your mission in providing excellence and active participation in the socio-economic activities for the upliftment and development of our community.h
Bulacan Vice Governor Daniel Fernando praised Mighty for contributing to the upliftment and progress of their community and for continuously providing employment for fellow Bulakenyos and participating in socio-economic activities.
“Lead by your standards of excellence as responsible leaders of our society, may your spirit move you to even greater heights,h he said.
Congratulating Mighty, BdO Unibank said: gWe have been a witness to the many achievements the company has attained during its evolution from a niche player into a major contender in the highly competitive cigarette industry. The companyfs prospects are very promising and you can count on us to be your partner in growth.h
The company was renamed Mighty Corp. in 1985 and bought the trademarks of Alhambra Industries in 1993. By 2000, Mightyfs expansion continued all throughout the decade as it purchased and upgraded its production and packing facilities.

Foreign tobacco firm want to work with Mighty Corp, local firms

The British American Tobacco (BAT) has signified its willingness to partnering with another cigarette manufacturing company to cement a strong foothold in the country’s lucrative tobacco industry.

Robert Eugenio, BAT Philippines head of corporate and regulatory affairs, said yesterday that the Lucky Strike cigarette-maker is open to any “beneficial” opportunity in the Philippines.

Since BAT’s return to the Philippine market in 2012, the company’s market share grew at a snail’s pace despite a money-losing marketing strategy of selling imported cigarette packets below the economical price.

BAT, which unveiled a $200- million investment plan for the Philippines in 2012, currently has a weak distribution network in the country, and been incurring an additional cost for the importation of its Malaysia-made Lucky Strike and Pall Mall brands.

“In the process of running a business, we would look at whether partnering with another company would make sense than putting up our own manufacturing facility,” Eugenio said. “In the past, we partnered with La Suerte Cigar and Cigarette Factory, but it was terminated when we left in 2009.”

Meanwhile, industry sources said that BAT has already approached the Wongchuking family of Mighty Corp earlier this year to ask if the latter is open to any partnership.

“I’m not aware and involved in such a transaction,” Eugenio said when asked if BAT is in talks with the Bulacan-based cigarette company.

Sources said BAT wants a partnership with Mighty following its success in snatching up a substantial market share of local market leader PMFTC, a joint venture of LT Group’s Fortune Tobacco Company and Switzerland-based Philip Morris International (PMI).

Since the new excise tax regime took effect in 2013, PMFTC fought tooth and nail to protect its market position against Mighty, which has been very aggressive in offering cheaper alternatives to Lucio Tan and PMI’s premium cigarette brands.

The country’s second largest tobacco company, Mighty, known for the P1-a-stick cigarette, managed to raise its market share from a mere 3 percent in 2012 to nearly 35 percent last year.

However, Mighty’s success is hounded by accusations of tax dodging and smuggling.

Mighty Corp doubles its tobacco purchase for the year

A cigarette manufacturing company announced it would double its purchase of tobacco from five million to 10 million kilos this year, which would boost the income of farmers in the area, the president of the National Federation of Tobacco Farmers Association and Cooperatives (NAFTAC) said.

NAFTAC president Mario Cabasal said the announcement of Mighty Corp was expected to break the farmers’ dependence on giant tobacco companies, who enter into contract with farmers to make them plant high nicotine varieties.

“The farmers now have a buyer for low-grade tobacco,” Cabasal said.

Mighty Corporation, a Filipino company, produces low-priced brand of cigarettes, which are popular among the masses. The company provided farmers 83 units of water pumps and 16 hand tractors.

The company also sponsored 100 college scholarship for children of tobacco farmers in La Union. It signed partnership agreements with farmers at the Hotel Ariana in Bauang, La Union last February 8.

Mighty Executive Vice President Oscar Barrientos said the company will compete with the giant tobacco companies in the purchase of tobacco, which they needed as cigarette filler.

Edgardo Zaragosa, Administrator of the National Tobacco Administration, welcomed the entry of Mighty Corporation in the market, “which is good because competition in tobacco trading will help farmers, especially if the price is right.”

“If Mighty is absent, we will be having problems selling tobacco,” Zaragosa said.

Mighty Corp unexpected increased its market share

Bulacan-based Mighty Corp. will continue to eat up a slice of market share from rivals as the Wongchuking-owned tobacco firm believes it offers quality but cheaper alternatives to expensive cigarette brands, a company official said.

In a briefing late Thursday, Oscar P. Barrientos, Mighty executive vice-president, said smokers continued to shift from premium brands to cheaper alternatives this year as prices of cigarettes in the domestic market rose due to reformed excise tax law.

“Mighty’s market share is rising because of our very competitive price as well as quality of our cigarettes,” Barrientos told reporters. “Consumers are shifting from premium to low-premium brands after the new excise tax law.”

Barrientos said Mighty’s market share grew from 5 percent in 2012 to between 10 percent and 12 percent last year. The company earlier claimed its market share stood at 20 percent in 2013.

“For this year, we’re targeting to expand it by two percentage points, or 12 percent to 14 percent,” Barriento said. “The country’s tobacco industry is estimated to be more than 100 billion sticks annually.”

Barrientos said the company currently sells its Mighty brand for P26 to P27 a pack, while Marvel brand for P25 to P26 per pack, both higher by P5 compared with last year’s retail price, reflecting the P5 increase in excise tax rate this year.

However, some retailers sell Mighty brand at P23 per pack, while Marvel brand P18.4 per pack.

Barrientos, meanwhile, noted a slight decline in number of adult-smokers in 2013 based on the report of the Department of Health (DOH).

But despite the decline in smokers’ population, Barriento said Mighty is still positioning for the forthcoming unitary excise tax rate of P26 per cigarette packet by 2017.

Barrientos said Mighty expects demand for low-premium cigarette brands will decline in 2017, while premium brands may regain their popularity in the next three-years.

“That’s why we launched our premium brands King and Chelsea in a bid to firm up our position.” the company executive said. Mighty is currently the country’s second largest cigarette firm in terms of market share, next to PMFTC Inc.

Barrientos, meanwhile, just shrugged off Marlboro-maker and Lucio Tan’s foreign partner, Philip Morris International (PMI), accusations against Mighty of tax dodging.

“Those are baseless accusations by Philip Morris,” Barrientos said “But we’re ready to face investigations by authorities. Our factory is open to any inspection by Bureau of Internal Revenue (BIR) and Bureau of Customs.”

Barrientos also explained the company managed to lower its operational cost as it does not pay royalty to foreign headquarters, like in the case of PMFTC, and has no foreign consultants or employees.

He, meanwhile, revealed that Mighty’s manufacturing cost of cigarette per packet declined last year from 2012 as the company expands its market share.

“Our cost per pack of cigarette is around P3.5 to P4 [excluding taxes], this is cheaper than in 2012 when our market share was small. We managed to reduce the cost as Mighty expands market share due to economies of scale,” Barrientos explained.

Mighty Corp on the malicious campaign against them

Mighty Corp. slammed the smear campaign against it by competitors, saying there may be a bigger agenda behind the mudslinging.

“Mighty continues to be vilified for having stood up to industry giants. Since last year, the smear campaign has been nothing more than a rehash of the same lies and allegations,” executive vice president and spokesman Oscar Barrientos said.

“It is puzzling and alarming that our critics have resorted to recycling old issues against us. And we have to ask, why?”

He said Mighty’s strong performance in the past 13 months appeared to have unsettled its competitors, notably Philip Morris Fortune Tobacco Corp., which controlled 94 percent of the market in 2012 until its share dropped to about 70 percent by the end of 2013.

Barrientos credited the government’s move to reform the country’s excise tax system and Mighty’s own corporate reforms for its strong performance.

“Our competitors have thrown everything, including the kitchen sink at us, and we have just become stronger and better. Obviously, Mighty has proven that even a small local company can go toe to toe with a giant monopoly like PMFTC. But is the smear campaign really just their way of dealing with their failures in the market or is there something more to it?” Barrientos asked.

“There may be a bigger agenda behind the anti-Mighty smear campaign. Reforms in the excise tax system have obviously dealt a heavy blow to PMFTC. It is a fact that they waged a campaign to stop the passage of RA 10351, because it would mean losing their monopoly. This could be a reason why they are now trying to pin us down, so that they can say the sin tax Law doesn’t work,” the Mighty official said.

Barrientos cited a claim by critics that Mighty was evading payment of P4 billion in excise taxes.

“We paid P8.2 billion in excise taxes last year. We were accused of evading tax payment because we were supposed to have paid P12 billion based on a 20 percent market share. We only hit 20 percent in December 2013, and yet our critics made it appear that we were doing 20 percent year-round which was totally untrue, Barrientos said.

Mighty Corp's market share increased this year

Bulacan-based Mighty Corp. said Thursday it expects to widen its market share in the tobacco industry, as it continues to supply quality but cheaper alternatives to expensive cigarette brands.

Mighty executive vice-president Oscar Barrientos said the increase in market share was due to the shift of the local market from premium brands to cheaper alternatives.

“Mighty’s market share is rising because of our very competitive price as well as quality of our cigarettes,” Barrientos said.

“Consumers are shifting from premium to low-premium brands after the new excise tax law,” he said.

Barrientos said Mighty’s market share grew from a range of 3 to 5 percent in 2012 to a range of 10 percent to 12 percent in 2013.

“For this year, we’re targeting to expand it by two percentage points, or to 12 percent to 14 percent,” Barrientos said.

He said the size of the tobacco market was more than 100 billion sticks annually and was continuously growing despite the increase in cigarette prices.

Barrientos said the company was now selling the Mighty brand for P26 to P27 a pack, Marvel brand for P25 to P26 a pack, which were both higher by P5 from last year’s retail price.

He said the adjustment reflected the P5 increase in excise tax rate this year. He said some retailers were still selling Mighty brand at P23 per pack and Marvel brand P18.4 per pack.

Mighty Corp launched its new premium brands

Expect competition in the local tobacco industry to heat up.

Mighty Corp., the oldest Filipino-owned tobacco company, has launched its premium brands King and Chelsea in a bid to firm up its position as the country’s second-biggest cigarette manufacturer.

“Our decision to enter the premium brand segment is part of the company’s thrust to reposition our brands and expand our reach into all segments of the market,” Oscar P. Barrientos, Mighty executive vice president, said.

“We hope to extend the reach of Mighty Corp. and strengthen our position as the top Filipino-owned tobacco company in the Philippines,” Barrientos added.

He said that both brands are premium in terms of smoke character. “But from the packaging and cigarette design, King is more traditional while Chelsea radiates unconventionality,” he explained.

The two premium brands are blended with the finest tobacco grades to give off a balanced taste and aroma. Both come in full flavor king size, lights king size and menthol 100s or a total of six different variants.

“One of our advantages is the smell, flavor and aromatic taste of our cigarettes that are also exceptionally smooth, mellow and attractively packaged,” Barrientos, a retired RTC judge, said.

Mighty’s premium brands will be categorized in the highest tax bracket for cigarettes.

“Our decision to expand our product lines is just part of our vision to become a major player in the market and show what a Filipino company can do,” Barrientos said.

The company was established in 1945 by businessman Wong Chu King with a small factory in Manila producing native cigarettes known as “Matamis.”

The company was renamed Mighty Corp. in 1985 and bought the trademarks of Alhambra Industries in 1993. It now operates a nine-hectare fully integrated manufacturing and processing plant in Malolos, Bulacan.

Mighty Corp. was able to build up its market share through an aggressive marketing push and heavy investments in research, development and production.

Foreign company willing to work with Mighty Corp, other local firms

The British American Tobacco (BAT) has signified its willingness to partnering with another cigarette manufacturing company to cement a strong foothold in the country’s lucrative tobacco industry.

Robert Eugenio, BAT Philippines head of corporate and regulatory affairs, said yesterday that the Lucky Strike cigarette-maker is open to any “beneficial” opportunity in the Philippines.

Since BAT’s return to the Philippine market in 2012, the company’s market share grew at a snail’s pace despite a money-losing marketing strategy of selling imported cigarette packets below the economical price.

BAT, which unveiled a $200- million investment plan for the Philippines in 2012, currently has a weak distribution network in the country, and been incurring an additional cost for the importation of its Malaysia-made Lucky Strike and Pall Mall brands.

“In the process of running a business, we would look at whether partnering with another company would make sense than putting up our own manufacturing facility,” Eugenio said. “In the past, we partnered with La Suerte Cigar and Cigarette Factory, but it was terminated when we left in 2009.”

Meanwhile, industry sources said that BAT has already approached the Wongchuking family of Mighty Corp earlier this year to ask if the latter is open to any partnership.

“I’m not aware and involved in such a transaction,” Eugenio said when asked if BAT is in talks with the Bulacan-based cigarette company.

Sources said BAT wants a partnership with Mighty following its success in snatching up a substantial market share of local market leader PMFTC, a joint venture of LT Group’s Fortune Tobacco Company and Switzerland-based Philip Morris International (PMI).

Since the new excise tax regime took effect in 2013, PMFTC fought tooth and nail to protect its market position against Mighty, which has been very aggressive in offering cheaper alternatives to Lucio Tan and PMI’s premium cigarette brands.

The country’s second largest tobacco company, Mighty, known for the P1-a-stick cigarette, managed to raise its market share from a mere 3 percent in 2012 to nearly 35 percent last year.

However, Mighty’s success is hounded by accusations of tax dodging and smuggling.

Farmers from Luzon express relief over Mighty Corp's help

FARMERS in Pangasinan and the Ilocos provinces have expressed relief that their tobacco leaves will have a sure market this year.

Expressing relief was Mario Cabasal, president of the National Federation of Tobacco Growers and Cooperatives (NFTGC) after learning that Mighty Corp has made commitments to initially buy at least 10 million kilograms of tobacco leaves at an average price of P70 per kilo and buy all the excess tobacco leaves that farmers could not sell to other buyers.

 “We limited to minimum areas fields planted to tobacco last year in anticipation of depressed demand due to the scheduled implementation of the sin tax,” Cabasal said. “good thing, some farmers were able  to sell part of their low-grade harvests to Mighty Corporation in 2013,” he pointed out.

“Now that we are assured of an alternative market, besides other tobacco companies, our members will again be inspired to devote larger areas to the cultivation of Ilocandia’s most important cash crop,” he said.

Fearing that tobacco prices and demand for the yellow leaf would dive as a result of the new excise tax law on cigarettes, many farmers in the Ilocos Region shifted to planting yellow corn, the only other cash crop that thrives in dry land where rainfall is scarce during the summer months. Profits from corn are, however, lower than tobacco.

Planting of the golden leaf started last month and selling the dry leaf often peaks just before the Holy Week.


“With Mighty’s assurance that the company will buy all the unsold tobacco harvested by farmers, we can also be sure that unlike in the past, prices will stay high even after the holiday season. Price cut downs on harvests after the Holy Week was an old practice of middlemen from Ilocos Norte to Pangasinan.

Mighty Corp continues to slice up market share

Bulacan-based Mighty Corp. will continue to eat up a slice of market share from rivals as the Wongchuking-owned tobacco firm believes it offers quality but cheaper alternatives to expensive cigarette brands, a company official said.

In a briefing late Thursday, Oscar P. Barrientos, Mighty executive vice-president, said smokers continued to shift from premium brands to cheaper alternatives this year as prices of cigarettes in the domestic market rose due to reformed excise tax law.

“Mighty’s market share is rising because of our very competitive price as well as quality of our cigarettes,” Barrientos told reporters. “Consumers are shifting from premium to low-premium brands after the new excise tax law.”

Barrientos said Mighty’s market share grew from 5 percent in 2012 to between 10 percent and 12 percent last year. The company earlier claimed its market share stood at 20 percent in 2013.

“For this year, we’re targeting to expand it by two percentage points, or 12 percent to 14 percent,” Barriento said. “The country’s tobacco industry is estimated to be more than 100 billion sticks annually.”

Barrientos said the company currently sells its Mighty brand for P26 to P27 a pack, while Marvel brand for P25 to P26 per pack, both higher by P5 compared with last year’s retail price, reflecting the P5 increase in excise tax rate this year.

However, some retailers sell Mighty brand at P23 per pack, while Marvel brand P18.4 per pack.

Barrientos, meanwhile, noted a slight decline in number of adult-smokers in 2013 based on the report of the Department of Health (DOH).

But despite the decline in smokers’ population, Barriento said Mighty is still positioning for the forthcoming unitary excise tax rate of P26 per cigarette packet by 2017.

Barrientos said Mighty expects demand for low-premium cigarette brands will decline in 2017, while premium brands may regain their popularity in the next three-years.

“That’s why we launched our premium brands King and Chelsea in a bid to firm up our position.” the company executive said. Mighty is currently the country’s second largest cigarette firm in terms of market share, next to PMFTC Inc.

Barrientos, meanwhile, just shrugged off Marlboro-maker and Lucio Tan’s foreign partner, Philip Morris International (PMI), accusations against Mighty of tax dodging.

“Those are baseless accusations by Philip Morris,” Barrientos said “But we’re ready to face investigations by authorities. Our factory is open to any inspection by Bureau of Internal Revenue (BIR) and Bureau of Customs.”

Barrientos also explained the company managed to lower its operational cost as it does not pay royalty to foreign headquarters, like in the case of PMFTC, and has no foreign consultants or employees.

He, meanwhile, revealed that Mighty’s manufacturing cost of cigarette per packet declined last year from 2012 as the company expands its market share.

“Our cost per pack of cigarette is around P3.5 to P4 [excluding taxes], this is cheaper than in 2012 when our market share was small. We managed to reduce the cost as Mighty expands market share due to economies of scale,” Barrientos explained.

Mighty Corp bought 10 million kilogram of tobacco products for tobacco farmers in Luzon

Mighty Corp (MC), one of the country’s local producers of low-priced cigarettes, yesterday announced it will buy 10 million kilograms of tobacco products worth millions of pesos from farmers in Northern Luzon and elsewhere in the country.

In an official letter of intent he sent to National Tobacco Administrator Edgardo D. Zaragoza, MC Executive Vice President Oscar P. Barrientos said it is buying tobacco from farmers 100 percent more than the five million kilograms his firm bought in 2013.

“This is to assure our tobacco farmers of our willingness to help in response to the published report of the market leader in the tobacco industry to lessen production this year,” Barrientos, a retired regional trial court judge, said.

The letter of intent, in effect, debunked critics’ allegations that MC has been importing raw materials from foreign countries at low prices and therefore it is no longer buying tobacco from local farmers.

Barrientos said their critics have been resorting to a disinformation campaign using convoluted data in an effort to undermine Mighty’s tremendous increase of its market shares.

MC’s market shares surged to almost 20 percent of the low-priced cigarette brands last year from three percent the previous year, resulting to the payment P8.2 billion in excise taxes.

According to Barrientos, their market shares shot up after the government effectively implemented Republic Act 10352, otherwise known as the Sin Tax Law that leveled the playing field in the multibillion-peso tobacco industry which was controlled by Philip Morris and Fortune Tobacco. The new law that took 14 years to pass and certified as urgent by President Aquino III caused a tremendous migration of smokers from the expensive premium and sub-premium brands to low-priced cigarettes.

It also resulted to some smokers, because of economic reason, to simply quit the vice and thus validated health authorities estimate that the sin tax law would result to the decrease of the number of smokers in the country.

Before the end of 2013, total tax collection by the BIR hit an all time increase of P91.6 billion from P60.4 billion in 2012. Taxes from cigarettes represented 61.6 percent or almost two thirds of all sin tax collection for 11 months of 2013.


Mighty Corp., then a minor player with a measly three percent of the market share with only P500 million in excise tax payments before the sin tax law took effect in 2012, contributed P8.2 billion in tax payments in 2013, discrediting its critics that it had allegedly committed technical smuggling and tax evasion.

Mighty Corp help to rebuild churches in Cebu, Bohol

The recent quake that destroyed or damaged historical churches in Bohol and Cebu has firmed up the advocacy of wholly-Filipino tobacco company Mighty Corp (MC) to build more churches in the country.

Retired Judge Oscar P. Barrientos, executive Vice President and spokesperson of MC, said in a statement that the destruction of churches during the quake in Bohol and Cebu has prompted MC to continue with its mission to strengthen the Filipino faith.

“The recent calamities that hit the country last year only strengthened the Filipino faith. Mighty Corp. will continue to build churches that Filipinos go to in their times of great trials,” said Barrientos in the statement.

The advocacy has prompted Church leaders, like Caceres Archbishop Rolando Tirona, to express support for MC in its struggle to clear its name amid charges of technical smuggling and tax evasion.

In a statement released by MC, Tirona was quoted as saying that MC “adheres strictly to the company’s commitment to its corporate social responsibility.”

The family that owns MC, the Wongchukings, has a record of building and repairing churches.

Last year, the Wongchuking Foundation Inc. (WFI), helped renovate the Diocesan Shrine of Immaculate Conception in Naic, Cavite, and rebuild the Basilica Minore of Our Lady of Piat in Cagayan.

WFI, said the MC statement, also supports poor but deserving students through scholarship programs, with beneficiaries from the elementary to the college level.

The foundation has also initiated relief operations when

Bulacan, the host province of the MC tobacco factory, suffered heavy damage from monsoon rains. It also launched relief operations in Naic, Cavite when the town was hit by Typhoon “Gener.”

Archbishop Emeritus Diosdado Talamayan, of the Archdiocese of Cagayan, also earlier expressed support for the Wongchuking family.

In a handwritten letter, Talamayan said, “For the past many years, I have personally known Mrs. Nelia Wongchuking. She, together with the entire family, are great devotees of Our Lady of Piat.”

Talamayan added that the family has built a chapel in Malolos, Bulacan as a gesture of their devotion.

Experts trained tobacco workers from Mighty Corp, local cigarette firms

Thirty people, including 17 from local tobacco manufacturer Mighty Corp., have completed a proficiency-training seminar conducted by American experts on tobacco leaf utilization, leaf chemistry and leaf purchases.
The seminar, jointly conducted by MC and American Tobacco Associates (TA) Inc., also trained the participants on the US Leaf Standards Grading System for both Burley and flue-cured tobacco developed by the US tobacco industry in the early 1900s.

Bobby Wellons, tobacco training specialist from the US Department of Agriculture (USDA) conducted the US Leaf Standards Seminar on Burley and flue-cured together with TA’s vice president, Hank Mozingo.


According to retired Gen. Edilberto Adan, MC president, understanding leaf tobacco grading standards provides the foundation for learning and appreciating tobacco qualities and characteristics in the Philippines.


“More specifically,” he said, “the seminars helped those directly involved in tobacco manufacturing gain a better understanding of the unique characteristics of each US tobacco grade and which grades are more suitable for specific blend needs.”     


While MC provided all the necessary on-site assistance and essentials, the TA group supplied all tobacco samples and training materials. 


The short but comprehensive course was conducted at the new MC facility (Pavilion) located inside the factory grounds.  


Aside from the MC participants, the others came from the National Tobacco Administration, Universal Leaf Philippines, Trans-Manila Inc., Continental Leaf, Prudence and WCD. 


The first two days of the seminar focused on the Burley tobacco grades and characteristics. The remaining three days covered flue-cured. 


At the end of the training course, each participant received a certification from USDA for completing the program.
Overall, the tobacco grading seminar has successfully served its purpose, providing participants with a deeper and a more extensive knowledge on the different sectors of the tobacco industry.

Experts trained Mighty Corp, local tobacco companies' workers

Thirty people, including 17 from local tobacco manufacturer Mighty Corp., have completed a proficiency-training seminar conducted by American experts on tobacco leaf utilization, leaf chemistry and leaf purchases.
The seminar, jointly conducted by MC and American Tobacco Associates (TA) Inc., also trained the participants on the US Leaf Standards Grading System for both Burley and flue-cured tobacco developed by the US tobacco industry in the early 1900s.

Bobby Wellons, tobacco training specialist from the US Department of Agriculture (USDA) conducted the US Leaf Standards Seminar on Burley and flue-cured together with TA’s vice president, Hank Mozingo.
According to retired Gen. Edilberto Adan, MC president, understanding leaf tobacco grading standards provides the foundation for learning and appreciating tobacco qualities and characteristics in the Philippines.


“More specifically,” he said, “the seminars helped those directly involved in tobacco manufacturing gain a better understanding of the unique characteristics of each US tobacco grade and which grades are more suitable for specific blend needs.”     


While MC provided all the necessary on-site assistance and essentials, the TA group supplied all tobacco samples and training materials. 


The short but comprehensive course was conducted at the new MC facility (Pavilion) located inside the factory grounds.  


Aside from the MC participants, the others came from the National Tobacco Administration, Universal Leaf Philippines, Trans-Manila Inc., Continental Leaf, Prudence and WCD. 


The first two days of the seminar focused on the Burley tobacco grades and characteristics. The remaining three days covered flue-cured. 
At the end of the training course, each participant received a certification from USDA for completing the program.
Overall, the tobacco grading seminar has successfully served its purpose, providing participants with a deeper and a more extensive knowledge on the different sectors of the tobacco industry.

About the shut down of Mighty Corp warehouse

The Filipino-owned manufacturer Mighty Corp has been dragged in several controversies for the past few months. The Bureau of Customs shut down a warehouse operated by the company in Malolos, Bulacan. As it was lauded by the business sectors and advocacy groups, the regular operation of the company didn’t affected about it.

They suspended the license of Mighty's customs bonded warehouse. But according to

Customs Commissioner John Phillip Sevilla said that the move of the government agency is to prevent revenue leakages while further investigation of the company’s alleged illegal activities.

“The initial report of a DOF task force reveals that Mighty Corp. committed serious violations of tariff and customs laws, rules and regulations, resulting in huge revenue losses for the government,” Sevilla added.

Meanwhile, Mighty’s executive vice president Oscar P. Barrientos said that the suspension order did not cover its operation for the domestic market.

“Nothing has changed, and until such time that we receive the final report of the task force, it will be business as usual,” he said. “We will continue to cooperate with authorities pending the full and final results of the inquiry being undertaken by Task Force Mighty Corp. We will address these allegations at the appropriate time as soon as we receive the final report on the findings. We have been transparent with the customs bureau, and we will continue to be transparent,” Barrientos added.

Mighty was accused of engaging in technical smuggling and downshifting consumption. They said that they barred the company from re-channeling duty-free cigarettes-for-export for domestic distribution and consumption. There are allegations that MC imported acetate tow. The said raw material used for filters, at $0.30 to $0.32 per kilo. They claimed most of their tobacco leaf and acetate tow imports are intended for export.

Is there's a proof that the Mighty Corp did illegal transaction under the law? The rival company didn't publicly announced its merger in 2010. 

Mighty Corp on their 10 million project for the tobacco farmers

Mighty Corp, the Filipino-owned manufacturer of cigarettes was the target of demolition job of its rival company for the past several months. They continued their CSR project in partnership of the farmers in the Northern region of the country. 

In a consultative meeting among the 200 tobacco farmer leaders in Pangasinan, La Union and Ilocos provinces and Mighty Corporation last February 8, with its commitment to help the farmers in the said region.

According to the Mighty Executive Vice President Oscar P. Barrientos said that they sought the help of the National Tobacco Administration. The government authority agreed over their planned purchase of P10-million kilograms tobacco leaves and P10-million Corporate Social Responsibility (CSR) for tobacco farmers and their beneficiaries. “We are grateful and we are looking forward to the firm commitments of Mighty Corporation to help the 65,000 strong tobacco farmers in the Philippines with their pronouncements this year to purchase 10-million kilograms of tobacco leaves and the P10-million outreach projects for tobacco farmers,” said Mario Cabasal, president of the National Federation of Tobacco Growers and Cooperation. With this proposal by the tobacco company there are a lot of opportunities that the farmers can be benefited about tobacco leaves.

Cabasal explained that after they learned about Mighty’s pledge to initially buy at least 10 million kilograms of tobacco leaves and to purchase all the excess tobacco leaves that farmers could not sell to other buyers. He lauded the direct help of Mighty to the tobacco farmers. The said assistance will include the donation of support farm implements like irrigation pumps and tractors, new 200 college scholar grants for the sons of daughters of tobacco farmers and the institutional support for the annual search for outstanding tobacco farmers and cooperatives.

“Now that we are assured of an alternative market, besides other tobacco companies, our members will again be inspired to devote larger areas to the cultivation of Ilocandia’s most important cash crop,” he said. “With Mighty’s assurance that the company will buy all the unsold tobacco harvested by farmers, we can also be sure that unlike in the past, prices will stay high even after the holiday season, Cabasal said.

Mighty's market shares surged almost 20 percent of the low-priced cigarette brands in 2013. It resulted of paying P8.2 billion in excise taxes. Kudos to the people behind this project, it is a great idea to extend their hands to the needy. They prioritize the needs of the farmers.

Mighty Corp’s main concern is the welfare of the tobacco farmers, and not just for the income. 

Mighty Corp speaks up on anti-dumping charges

Over the past several months, Filipino-owned tobacco company, Mighty Corp. chided its critics who pushed over the the allegation on the anti-dumping issue. 

According to Mighty vice president and retired judge Oscar Barrientos said that the critics must think that “ignorance of the law excuses no one,” which referred to the claim of Ilocos Sur-based Banayoyo Reforestation and Tobacco Growers Credit Cooperative.

He added that the said anti-dumping law stated hat “simple assertion, unsubstantiated by relevant evidence, cannot be considered to meet the requirements of the law,” and not a recourse for trial by publicity.

Barrientos dismissed the charges of Francisco Gamboa, president of the said cooperative which claimed that the Wongchuking-owned company been importing tobacco leaf at rates way below the floor price mandated by the government. The law “declared the policy of the state to protect domestic enterprises against unfair foreign competition and trade practices.”

“Gamboa should understand that there are specific requirements for initiating an investigation for anti-dumping,” he said. “These are evidence of dumping, injury and causal link between the dumped imports and the alleged injury; and upon receipt of a properly documented application and before proceeding to initiate an investigation, the secretary [of Agriculture] shall notify the government of the exporting country about the impending anti-dumping investigation.”

“The law requires that domestic producers supporting the application must have at least 25-percent interest of the total production.”, he explained.

Meanwhile, Barrientos said if the agriculture secretary decided to initiate an investigation under special circumstances, “without having received a written application by or on behalf of a domestic industry for the initiation of such investigation,” he should “proceed only if he had sufficient evidence of dumping, injury and a causal link to justify the initiation of an investigation.”

Whatever it takes, Mighty Corp has been dedicated in helping a lot of farmers despite of the issues pointing at the company.

Concerned groups asked to slow down on Mighty Corp's investigation

Bulacan-based tobacco manufacturer, Mighty Corp has been in the middle of controversies for the past several months already. And a lot of concerned groups asked to slow down about the investigations over allegations of underdeclaration of products of an established local tobacco company in the country.

According to Ako-Bicol party-list Rep. Rodel Batocabe said the probe being conducted in the House of Representatives into “unscrupulous entities” in the cigarette industry should not focus solely on one company but the entire industry.

“If we were to investigate, let us not single out one company but [look into] the entire industry to prevent any unnecessary innuendos or speculations,” said Batocabe who also a member of the House Committee on Ways and Means.

“As member of the Ways and Means committee, I believe that any investigation to be conducted should be objective and fair,” Batocabe said.

“And the only interest which we should protect is that of the government,” he added.

Meanwhile, Kabataan party-list Rep. Terry Ridon warned the Congress regarding malciious lies pointing to Mighty.

“… We will always be in defense of national firms against offensives of foreign firms to force it out of business,” Ridon said, implying local companies such as Mighty should be supported for providing livelihood to millions of Filipinos apart from the fact that it is paying billions in taxes to the government.

Mighty legal counsel Miguelito Ocampo denied all allegations against Mighty Corp. “While our company cannot comment on how other cigarette companies price their cigarettes, what we can say is that our company can sell one-peso-per stick cigarettes because... Mighty does not pay royalty fees to foreign companies for the use of our brands of cigarettes,” Ocampo earlier said.

Mighty Corporation Assured Farmers of Tobacco Leaf Purchase

Pangasinan and Ilocos farmers have expressed relief that their tobacco leaves will have a sure market this year because of local cigarette manufacturer Mighty Corporation or Mighty Corp.

The National Federation of Tobacco Growers and Cooperatives (NFTGC) President Mario Cabasal was elated after learning that Mighty Corporation has made commitments to initially buy at least 10 million kilograms of tobacco leaves at an average price of P70 per kilo and buy all the excess tobacco leaves that farmers could not sell to other buyers.

“We limited to minimum areas fields planted to tobacco last year in anticipation of depressed demand due to the scheduled implementation of the sin tax,” Cabasal said. “good thing, some farmers were able to sell part of their low-grade harvests to Mighty Corporation in 2013,” he pointed out.

“Now that we are assured of an alternative market, besides other tobacco companies, our members will again be inspired to devote larger areas to the cultivation of Ilocandia’s most important cash crop,” he added.

Fearing that tobacco prices and demand for the yellow leaf would dive as a result of the new excise tax law on cigarettes, many farmers in the Ilocos Region shifted to planting yellow corn.  Profits from corn are, however, lower than tobacco.

BIR Rakes in 8 Billion Pesos From Mighty Corporation

According to the Bureau of Internal Revenue, the excise tax paid by Mighty Corporation or Mighty Corp made a quantum leap from P300 million in 2012 to at least P8 billion for the whole year of 2013.

Mighty Corporation Spokesperson Oscar Barrientos added that the tax paid for the year 2013 by the Filipino-owned cigarette manufacturing company just past reflects the jump in the market share of the company and their fair share in the increased taxes on “sin” products.

Barrientos, a retired regional trial court judge, said the facts should put to rest false accusations that Mighty Corporation has not been paying its taxes faithfully.

He further pointed out that despite charges in the news media and by some members of Congress against the company, no case has been filed in court.

In fact, Barrientos pointed out, the BIR and the Bureau of Customs have cleared his company of any tax deficiency this year.

The company paid P300 million in 2012, the former judge explained, when its share of the local market of cigarette was a measly 3%.  This share shot up since the government put into effect Republic Act 10352, otherwise known as the new sin tax law.

The law has synchronized a five-year adjustment of taxes on cigarettes for it to become a uniform P30 per pack in five years covering all brands.

Records of the Bureau of Internal Revenue (BIR) had shown that excise taxes from both cigarettes and alcohol products increased by 81.5 percent despite a decline in the number of sticks sold.  Total tax take from January to November hit an all-time high of P91.6 billion from P60.4 billion in 2012.

Taxes from cigarettes represented 61.6 percent or almost two thirds of sin tax collections for 11 months.

Mighty Corporation which until the year 2012, was a minor player, pitched in more than P8 billion of the excise tax, not to mention the income tax the company will have to pay for the same year come deadline time.