Manos Koukourakis, general manager of Japan Tobacco Inc said recently that Philippine governemt can meet its excise tax collection target, if not exceed it, as the drop in usage is not as dramatic as it was expected. Koukourakis noted that in the country there are 52% smokers which means that one in two Filipinos smoke cigarettes.
This ratio gradually reduced to 46% and at present it is around 43%. Koukourakis said that almost 18 million Filipinos smoke cigarettes. They do consume 12 billion cigarettes a year.
A research by Japan Tobacco showed a drop in usage of about 12.4% to 11.6 billion cigarettes. Tobacco company experts believe that in reality the drop is less than 12%. Outside the USA, Japan Tobacco makes such cigarettes brands such as Winston, Camel and Salem.
The Philippine government had expected cigarette usage to drop by 50% following adopting of the excise tax bill. However, Koukourakis said that the expectations of private companies and the government failed. The latest data shows that total market consumption dropped by just 8% and not by 50% as it was expected.
Koukourakis noted that the inflow of foreign brands had greatly driven smokers to continue consuming cigarettes. The low-price cigarette brands took a portion of the market share of the premium brands. These are brands that cost P1 per cigarette, or P17.80 for each pack.
Today the majority of tobacco consumers choose cheap cigarettes to save their money and this market offers a large variety of choices.
Koukourakis considers that the Filipinos would continue to use tobacco in the long run, translating into more income for the government. That is an effective legislative step from a government perspective, because at the end of the day, the government will achieve the financial goal it had, so Japan Tobacco Inc appreciates that decision. Koukourakis says the government did a good job,