PHILIP Morris International Inc. (PMI) announced last week that the estimated total cigarette market of the Philippines decreased by 8.1 percent in the third quarter.
The company said in a statement on October 19 the decrease was “mainly due to the impact of excise tax-driven price increases, including those on PMI’s full brand portfolio in the fourth quarter of 2016.”
According to PMI, the decline in its cigarette shipment volume to the Philippines was due to the lower total cigarette market, as well as lower cigarette-market share. The latter points particularly to PMI’s low- and super-low price brands “as a result of the timing of competitors’ price increases, which initially widened the price gaps to PMI’s principal competitor’s discounted brands.”
The gap was partly offset by PMI’s Marlboro brand, which the company said “benefited from in-switching from lower-priced brands.”
Year-to-date, the decline of the estimated total cigarette market, PMI’s cigarette shipment volume and cigarette market share all reflected the same dynamics as in the quarter, the company said.
The Marlboro brand, however, also saw shipment-volume decrease in the third quarter in the European Union, mainly due to Germany, Italy and Spain. The decrease was also noted in Eastern Europe, Middle East, Africa, predominantly due to Saudi Arabia.
The company noted the decrease in Saudi Arabia reflected the impact of the new excise tax implemented in the country in June that resulted in the doubling of the retail price of Marlboro from 12 Saudi Arabia riyals (P164.83) to 24 Saudi riyals (P329.67) per pack. The decrease in Asia of the shipment in Marlboro was mainly due to Japan, “principally reflecting out-switching to HeatSticks,” the company said. This was partly offset by Indonesia and the Philippines, PMI added.
PMI said the cigarette shipment volume of its other brands decreased “mainly due to local, low-price brands in the Philippines, Russia and Ukraine, partly offset by Indonesia and low-price brands in Pakistan.”