A vendor sells cigarettes at a supermarket in Quezon City. AFP FILE PHOTO
MANILA, Philippines—Cigarette maker Philip Morris Fortune Tobacco Corp. (PMFTC) on Friday appealed to its distributors and retailers to sell its products at pre-sin tax recommended retail prices, saying it has not yet raised the prices of its cigarette products.
PMFTC’s cigarette brands are among the most popular among smokers, including Marlboro and Philip Morris.
Cigarette vendors told the Inquirer that many retailers raised the prices of cigarettes even before Christmas, although the higher sin taxes took effect only starting Jan. 1
“We wish to clarify that PMFTC has, to date, not raised the prices of its cigarette products,” the company said in a statement.
“It has come to our attention, however, that some wholesalers and retailers have started selling our cigarette products at higher prices even during the holidays,” it added.
Hoarding
Some vendors also said that some suppliers had been hoarding last year’s stocks in order to make a windfall profit now that taxes have been raised.
“We have raised prices by P1 per stick,” said Aling Edita, who sells cigarettes along Shaw Boulevard in Mandaluyong. “I hear that in Pasay (City), they raised prices by P2 per stick.”
Edita said a pack of Marlboro and Philip used to sell at P33. But now they go for P44 and P44.50, respectively. She added that a stick of Marlboro or Philip now fetches P4, but said they were selling at P5 in Pasay City.
On the other hand, the Rustans Supermarket branch at the Shangri-La Plaza Mall is having a promotional sale with one pack of Marlboro for only P24. However, the Inquirer found the shelf almost empty.
No delivery
A store clerk said that while the supermarket extended the promo until Jan. 15, there was “no delivery” of the popular brands.
“We can assume that this was in reaction to the (Bureau of Internal Revenue’s) publication of the revised tax rates and the subsequent media coverage and pronouncements of various government authorities on this issue,” PMFTC said.
PMFTC is a merger between Philip Morris Philippines Manufacturing Inc. and Fortune Tobacco Corp. Together, they control at least 90 percent of the domestic cigarette market.
“For now, we would like to encourage all our customers to sell our cigarette products at our current recommended retail prices,” the company added.
The BIR has issued Revenue Regulation No. 17-2012 dated Dec. 21, which says that machine-packed cigarettes are now classified into two—those whose net retail price (NRP) is P11.50 or less per pack and those with NRPs above that point.
Starting Jan. 1, excise tax on the lower tier cigarettes was raised to P12 per pack while that on the higher tier was set at P25.
This means that excise tax on the cheapest brands increased by as much as 340 percent (more than four times) or by P9.28.