Friday, September 5, 2014
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.
Tuesday, September 2, 2014
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.
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.
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.
Thursday, August 28, 2014
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.
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.
Monday, August 25, 2014
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.
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.
Monday, August 18, 2014
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.
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.
Subscribe to:
Posts (Atom)