Lucky Strike cigarettes now back in Phl market

MANILA - British American Tobacco, maker of Lucky Strike cigarettes, is making a comeback in the Philippines.

The company pulled out of the local market nearly 4 years ago after a failed taxation case at the Supreme Court, which it says would have leveled the playing field in the local tobacco industry.

Now, British American Tobacco is back because it expects the Aquino government will institute the reforms it fought for in 2008.

"With the change in administration, very strong signals from the Aquino government that excise tax reform is on top of the agenda, the company made a decision to suspend that withdrawal and come back in full force," said James Lafferty, general manager of British American Tobacco Phils.

British American Tobacco was fighting a law that imposes higher taxes on cigarette brands that entered the market after 1996. That meant higher taxes for brands like Lucky Strike, which was introduced in 2001; and lower taxes for its competitors.

Lafferty said the proposed increase in excise taxes on tobacco, which is pending in Congress, will make it easier for them to compete.

"The single concept that is important to us is the level-playing field... I don't care how we fix the level playing field. There's one way which says every cigarette will pay the same excise tax. That is a very contentious point, that's the single tier. That's one way to fix it," he said.

"I just want to get in the ring and get the gloves on. Right now, what you have is a system that ropes off the market place and allows only one company to effectively compete fairly."

Philip Morris Fortune Tobacco, which controls over 90% of the market, is opposed to the new measure. It insists the new taxes won't accomplish the government's aim of boosting revenues or reducing smoking.

British American Tobacco says otherwise.

"Who could be opposed to a levelplaying field? The only person who can be opposed to that are the people who benefits from the monopoly," Lafferty said.

Lucky Strike is actually already back in the market and it has been on sale for about a week. But the cigarettes are mostly imported from Malaysia.

Lafferty said they will only invest in factories here, when President Aquino makes good on his promise to make the Philippines more business-friendly. (wires)