The third-biggest tobacconist across the globe, Japan Tobacco International is going to make use of the raising market share of the brands selling in Great Britain, including best-seller Mayfair, Benson and Hedges and Mild Seven. The company declared that they would raise prices of their top-selling brands by 10 pence in December.
Tomas Esposito, spokesman for Japan Tobacco director Daniel Torres, said that they feel that it would be the most favorable occasion for increasing prices, since smokers would barely feel the price difference and would stay with their beloved brands. He added that the price increase has been reasoned by the costs of tobacco leaves that jumped in 2009.
The producer of Silk Cut, Winston, and more than dozen of other cigarette brands available at the British cigarette market admitted that growing popularity of its products had encouraged the company to hike the prices by 2 percent. However, the company’s long-run objective is clear – to secure the top spot in the UK market ahead of the current leader Imperial Tobacco, and according to the spokesman, the company experts to achieve within the next several years.
Japan Tobacco’s principal rivals immediately declared that had no intention to hike prices.
Two years ago JTI purchased the largest Irish cigarette maker, Gallaher Group, in order to increase its presence in the British and European and get the access to such landmark brands like cigs4us.biz/virginia-cigarette and Winston. But, the Japanese giant has no plans of slowing down, as they keep investing in the British operation unit to boost the domestic market share.
According to Tom Esposito, Japan Tobacco’s share jumped to 40.5 percent in the third quarter, up from 39 percent reported last year. Basing on those records, the spokesman said that major rival Imperial dropped to 2 percent, and currently has a 42.6 share.
However, Imperial rejected these reports, stating that according to the company’s internal documentation their market share fell just 0.6 percent within the last 12 months mainly because of sharper competition in the discount brands segment.
Experts say that Imperial gained its principal success with its discount brands - Lambert & Butler and Richmond, whereas Gallaher, former top cigarette company in the UK lost its leadership position, since it was focused at production of premium brands like Benson & Hedges and Silk Cut.
But, after the acquisition, JT reoriented the production in order to focus on less expensive brands, and recently gained first victory when its major mainstream brand Mayfair beat Lambert & Butler to take leading position in the UK cigarette market.
Japan Tobacco will also raise praises of its cheapest brand Sterling, but it will still be in the same price category as Pall Mall and Windsor Blue. This segment is the only sector to experience sales growth in the overall market, which is slowly but constantly declining.