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Marlboro is latest cigarette brand jostling to expand Jamaican market share
With a firmer filter, Marlboro cigarettes should be easier to butt out.<strong></strong>
Business
Karena Bennett | Senior Business Reporter | bennettk@jamaicaobserver.com  
November 28, 2016

Marlboro is latest cigarette brand jostling to expand Jamaican market share

Tobacco giant Philip Morris International (PMI) will be introducing a new line of Marlboro cigarettes to the Jamaican market, Marlboro 2.5.

The introduction of the “new and improved” cigarettes comes against a recent influx of tobacco distributors and manufacturers on the island as the companies try to fill a ten-year gap in local cigarettes after Carreras Ltd locked down its production plant in St Catherine to focus solely on distribution of its imported brands.

PMI will launch the product tomorrow in the presence of retailers across Jamaica.

According to the company, Marlboro 2.5 boasts a new look with a “modern soft-to-the-touch pack and the cigarette filter is much firmer and sturdier than other cigarettes on the market, making it much easier to stub out and also alleviating the high smoke smell”.

It added that the technology used to create the new product also preserves the tobacco, keeping the flavour consistent throughout the cigarette.

Cigarettes are known to harm both smokers and others breathing their cigarette smoke — increasing the risk of lung cancer and other severe illnesses. Following global trends, cigarette packages in Jamaica must carry graphic warnings of the dangers of smoking and new laws severely prohibit smoking in public.

But despite the restrictiions, recently there has been increased interest in claiming a share of the small Jamaican market from the one dominant player.

Up to 2010, Carreras, a subsidiary of British American Tobacco Company, was the exclusive local distributor of cigarette brands Dunhill, Matterhorn, Craven A and Rothmans, and controlled approximately 99 per cent of market share. Musson Jamaica, which distributes Marlboro and Green brands, accounted for the remaining one per cent.

Still, South Africa-based distribution company, Pacific Tobacco hopes to capture at least three per cent of an estimated 120,000 smoking population in Jamaica by next year, with hopes to increase that number to 20 per cent by 2021. Meanwhile, Special Economic Zone manufacturing company, Nostic Agricultural & Manufacturing Ltd, is eyeing at a minimum a 15 per cent market share by 2019.

A pack of 20 cigarettes sells for an average of around $800. Recently, the Government increased the special consumption tax on cigarette from $12 per stick to $14 per stick to fund the promised $1.5 million tax break, noting that the tax would garner $574 million for the fiscal year.

That equates to an estimated 41 million cigarettes sold annually.

“At present a stick of cigarette costs $40 and let me send the signal now, there is no need for it to go beyond $45 dollars if $2 is added in taxes because we know the tendency out there in the market,” the finance minister cautioned.

Last year the Government projected an estimated revenue gain of $488 million from an increase in special consumption tax of $1.50 to $12 per stick. However, Carreras is worried about its declining profit margins and that the taxation hike continues to open the door to the importation of illicit cigarettes.

Six years ago the distributor addressed the matter stating that brands such as More, Kool, Benson & Hedges, Newport and Beedis and counterfeit Rothmans and Marlboro were being illegally imported and sold in Jamaica. Carreras will again host a press conference to address the importation of counterfeit cigarettes in large quantities and the impact of the illicit infiltration on the national economy.

According to Carreras, efforts by the Jamaica Constabulary Force and the Jamaica Customs Agency have stemmed many of the illicit trade channels. However, the company points out that these products continue to enter the ports without detection and therefore highlights the need for additional enforcement from the relevant authorities.

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