BAT doubles tobacco leaf sourcing in PHL to 3.6M kilos

British American Tobacco, Inc. (BAT) will source 3.6 million kilos of tobacco leaves from the Philippines this year, double the 1.8 million kilos it sourced from the country last year, a company official said Tuesday.

BAT Philippines general manager James Lafferty added that the firm will continue to buy 3.6 million kilos locally going forward and may increase the amount when the company expands.  

Universal Leaf Philippines Inc. supplies BAT with the tobacco leaves, which are then shipped to the company's manufacturing facility in Malaysia to be blended with other leaves and packed into cigarettes. The cigarettes are then imported back to the Philippines.

BAT will be spending "in excess of $50 million this year," said Lafferty, part of its planned $200 million investment in the Philippines over the next five years.

The company earlier said that the investment would hinge on the passage of the sin tax measure, which it said would level the playing field for cigarette firms. The sin tax reform measure removes the price freeze used to tax tobacco products under the current system—which benefits older brands (such as industry giant Philip Morris Fortune Tobacco Philippines Corp.) which are taxed according to 1996 prices, unlike newer brands which are taxed according to their current prices.

BAT, which manufactures Lucky Strike cigarettes, brought the brand back to the Philippines in 2012 after the company pulled out of the market in 2009.

In May BAT will launch Lucky Strike Click and Roll, a menthol cigarette, in the Philippines. "The new variant will be launched in two weeks and it will be the first time the product, the Lucky Strike Click and Roll, will be sold in Asia," said Lafferty.

"Filipinos like menthols," he added. — BM, GMA News