Cigarette giant says 2010 exports up 13% last year

Owing largely to an increase in cigarette demand in Thailand, Philip Morris Fortune Tobacco Corp. on Tuesday reported that cigarette exports increased by 12.9 percent to 7 billion sticks from 6.2 billion in 2009. Last year’s merger of Philip Morris and Fortune Tobacco has resulted in a virtual monopoly of the cigarette industry as the company has captured 92.8 percent of the market in combined sales in 2010. The company refused to give income estimates as it prepares an audited report due April 15. Philip Morris Fortune Tobacco is looking at expanding its output by another 765 metric tons of burley tobacco in Mindoro. Officials said about 450 hectares of land in Mindoro might be converted into a tobacco farm. Lenient PHL measures Compared to other countries in Asia-Pacific — like Thailand, which imposes heavier restrictions on tobacco — the Philippines remains a haven for the cigarette industry. Last October, GMA News reported that while Philip Morris opposes the proposal to display graphic health warnings on cigarette packs in the Philippines, its Batangas plant manufactures cigarettes exported to Thailand in packs with gruesome pictures of cancer. Five former secretaries of the Department of Health (DOH) in January asked the Supreme Court to validate a DOH order that will require cigarette companies to display graphic warnings on product packages, saying this will “increase the motivation of smokers to quit." Former DOH Secretary Jaime Galvez-Tan also urged lawmakers to raise taxes on cigarettes to discourage smoking. Proposal to reclassify tobacco Meanwhile, Philip Morris Fortune Tobacco said it is against the proposal to reclassify tobacco into one or two categories as this may result in a spike in taxes that have already burdened cigarette manufacturers in the Philippines. “Reclassification is a disguise [for] massive tax increase. It will cause massive distortion to the market. We’re good with the current system," company president Chris Nelson said. Members of the Lower House have said the classification of tobacco products into two would raise revenues by P20 billion. Placing them under one classification, on the other hand, would raise revenues by P40 billion. In 2010, tax collections from cigarettes and alochol reached P31.6 billion. — With Paterno Esmaquel II/VS, GMA News