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.