British American Tobacco (BAT) said that he always bought the tobacco from the Philippines, even when he left the country in 2009.
James Lafferty, BAT Philippines Director General said that the cigarette firms buy about 2 to 3 million pounds of Philippine tobacco each year, even when she packed up and left the country three years ago. Lafferty said the Philippine Tobacco Company uses some of its products, selling cigarettes in Europe and Asia.
“It’s not massive, but we bought the Philippine tobacco, when we were not even here. BAT does not sell anything in the Philippines, but we bought tobacco here,” said Lafferty; he denied reports that the company never bought one leaf tobacco in the country. Lafferty said the company buys tobacco from a generic list Philippines, Inc (ULPI).
According to the National Tobacco Administration (NTA), ULPI bought 44,763,000 pounds of leaf tobacco in the local 2011, or 56.43% of 79.33 million kg of total production last year. “It shows our commitment to the country, we purchase each year, not even a business, because we export and use it in other countries,” says Lafferty. Cigarette Company had left the Philippines in 2009, as he claims that he could not survive under the current excise tax system cigarette brands, as introduced in the country since 1997 introduced a higher tax rate.
BAT back in February of this year, he expects that the excise tax reform proposals, priority actions Aquino administration, will soon be adopted and will provide a “level playing field” for all parties to the tobacco industry. Lafferty said the company plans to double its purchase of leaf tobacco in the Philippines, with 1.8 million kg this year to 3.6 million kg in the next year, as part of its expansion plans in preparation for the anticipated adoption of the so-called sin tax expense reform.
Lafferty said that BAT is about 5% of the total production of tobacco leaf in the Philippines every year, despite a 0.1% share of the local market of tobacco products. In general, the tobacco market in the Philippines is estimated at 100 billion pieces per year. “So we have about 5 percent of the market, a 0.1% stake. I think that it’s not bad. I buy fifty times my share of local, this is a real commitment to the Filipino farmers,” says Lafferty.
BAT hopes to sell 150 million sticks of cigarettes in the Philippines this year as it plans to expand its products in more retail stores across the country. The company has 900 brands worldwide, but this is only the beginning of Lucky strike brand in the Philippines since he returned in February. Lafferty said that Cigarette Company hopes to sell more of their products in the Philippines excise tax reform should be in place next year. BAT aims to remove Annex D, which in the current tax system classifies cigarette brands in the old and new, allowing different tax rates for brands that have been in the country until 1997, and those who entered in the local cigarette industry in 1997 year.
The company maintains the support of the Government House Bill 5727 by the author Cavite Rep. Joseph Emilio Abaya, which was approved by Congress last month. The excise tax reform bill is expected to generate P33 billion in revenues from both tobacco and alcohol, in the first year of its implementation, 85% of which goes to health care, and the remaining 15% will be used to support the tobacco manufacturers.
Cigarette giant Philip Morris Fortune Tobacco Corporation (PMFTC) accounts for more than 90% of the local market of tobacco products. The company was the second largest buyer of tobacco in 2011, the acquisition of 14,739,000 kg or 18.58% of total tobacco production in the last year.