Price war on cheap cigarettes attacked

PUBLISHED : Wednesday, 17 August, 2005, 12:00am
UPDATED : Wednesday, 17 August, 2005, 12:00am
 

Anti-smoking campaigners say cuts aim to get more smoking before ban bites


The tobacco price war is being extended from premium brands to cheap cigarettes - a move anti- tobacco campaigners condemned as aimed at getting more people to take up the habit before a smoking ban in restaurants dents sales.


Industry sources said the price of the Philip Morris brand Next will drop $4, to $20. Last week British American Tobacco launched a short-term promotion offering a twin pack of its low-priced Winfield Super Lights Menthol for $44. One pack costs $24.


Philip Morris would not say whether it would be cutting more prices. The price war began this month when it cut $2 off the price of premium brands Marlboro and Virginia Slims, which now cost $30 a pack. Its main competitor, British American Tobacco Hong Kong, responded by cutting the prices of its Kent and Capri brands by a similar amount, to $30-$32.


A Philip Morris International spokeswoman said demand for low-priced cigarettes was rising. They account for more than 30 per cent of tobacco sales in Hong Kong.


'Having experienced a poor economy, smokers began to start smoking cheaper cigarettes,' she said. 'The market share of lower- priced cigarettes enjoyed high growth, with a double-digit increase in percentage.'


Philip Ho Wing-hong, corporate and regulatory affairs manager for British American Tobacco Hong Kong, agreed the market for lower-priced cigarettes was 'more active', but said the company did not want to see a price war 'because from the business point of view, we will all suffer'.


Sophia Chan Siu-chee, head of nursing studies at the University of Hong Kong, said the price cuts were a 'counter-strategy' by the industry to attract new smokers before the government banned smoking in restaurants - which she said would encourage smokers to quit.


Medical-sector legislator Kwok Ka-ki hit out at the tobacco companies' 'irresponsible' actions. 'Before the implementation of the law they want to enlarge their market,' he said.


Dr Kwok said tobacco companies were wooing legislators to water down the proposed legislation restricting public smoking, which a bills committee is considering.


'I call on my colleagues at the Legco not to betray the public,' he said.


The government said it would consider further increases in tobacco duty to discourage smoking. But this would be examined against 'the implications that further increases in duty might have on the government's efforts to combat illegal tobacco products', said a spokesman.


Newspaper Hawker Association vice-chairman Tang Yap-ming said he doubted a price war between cheap cigarette brands would get more young people smoking. 'Young people aged over 20 do not smoke cheap cigarettes,' he said.


FALLING PRICES


Next $24 down to $20


Marlboro $32 to $30 (except Marlboro 100)


Virginia Slims $32 to $30


Kent $34-$32 to $32-$30


Capri $34-$32 to $32-$30


Winfield Super Lights Menthol twin-pack promotion $44. Single pack $24.


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