Mighty Corp on their strategic plan to widen their market share

Bulacan-based Mighty Corp. said Thursday it expects to widen its market share in the tobacco industry, as it continues to supply quality but cheaper alternatives to expensive cigarette brands.
Mighty executive vice-president Oscar Barrientos said the increase in market share was due to the shift of the local market from premium brands to cheaper alternatives.
“Mighty’s market share is rising because of our very competitive price as well as quality of our cigarettes,” Barrientos said.
“Consumers are shifting from premium to low-premium brands after the new excise tax law,” he said.
Barrientos said Mighty’s market share grew from a range of 3 to 5 percent in 2012 to a range of 10 percent to 12 percent in 2013.
“For this year, we’re targeting to expand it by two percentage points, or to 12 percent to 14 percent,” Barrientos said.
He said the size of the tobacco market was more than 100 billion sticks annually and was continuously growing despite the increase in cigarette prices.
Barrientos said the company was now selling the Mighty brand for P26 to P27 a pack, Marvel brand for P25 to P26 a pack, which were both higher by P5 from last year’s retail price.
He said the adjustment reflected the P5 increase in excise tax rate this year. He said some retailers were still selling Mighty brand at P23 per pack and Marvel brand P18.4 per pack.

Cigarette stamps implementation agreed by Mighty Corp

Filipino-owned cigarette producer Mighty Corp. yesterday welcomed the early implementation of the Internal Revenue Stamp Integrated System (IRSIS) designed to further improve the collection of tobacco tax.

“Our contingency is now fully activated to meet the smooth implementation of the IRSIS which we drew up as early as six months ago in anticipation of its final approval by the finance department upon the recommendation of the BIR,” retired regional court judge Oscar P. Barrientos, MC executive vice president and spokesman, said.
Barrientos said Mighty is ready to comply with the new BIR regulation saying that some of their machines are equipped with stamp applicators.
The BIR has just released Revenue Regulation 7-2014 which imposes the affixture of Internal Revenue Stamps on imported and locally-manufactured cigarettes as well as the use of the IRSIS for the ordering, distribution and monitoring of tobacco manufacturers.
According to BIR chief Kim Jacinto-Henares, all cigarette companies have until the end of this year to sell or pull out of retail shelves those unstamped packets produced before implementation.
All cigarettes whether for domestic sale or export shall be affixed with the new internal revenue stamps.
“This measure will strengthen our capacity to combat smuggling of tobacco products. We believe in implementing regulations with enough teeth to bite down on smugglers who are intent on depriving the nation of critical resources for greed and private gain,” Henares said.

Allegation against Mighty Corp on illicit trade inaccurate

Allegations of undervaluation against Mighty Corp are highly speculative and inconclusive, according to the Bureau and Internal Revenue (BIR) and Senate Tax Study and Research Office (STSRO).

In the Oversight Committee Hearing held last Oct. 22, 2014, the government offices which monitor the implementation of the R.A 10351 or the Sin Tax Law presented the achievements and developments in their offices.
During the hearing, Sen. Vicente Sotto III, prior to asking questions, showed a presentation on Mighty alleging undervaluation that he said came from the STSRO.
However, the information in said report is considered for further analysis and therefore, not accurate.
BIR Commissioner Kim Henares, who was in the hearing, opposed the STSRO data which includes the discredited information on alleged illicit tobacco trade furnished by the International Tax and Investment Centre (ITIC) and Oxford Economics, as inaccurate, incomplete and not validated.
She also added that these data were commissioned and biased that may have been paid by PMFTC and that cannot be a basis against MC.
Based on ITIC’s Web site, one of its key officials is also a ranking official of Philip Morris International.
Rep. Raneo Abu of Batangas’ 2nd District, vice chairperson of the House Ways and Means Committee and a ranking member of Joint Congressional Oversight Committee (JCOC), has also mentioned that if the data or the information were not validated and biased, the BIR, BoC and the NTA should coordinate and these offices should be the one to submit the accurate, validated and unbiased information to the oversight Committee.
Partially reported to the oversight committee were inconclusive findings from Mighty’s suppliers, Eastman Chemical Company and Celanese Corp.
In dismissing the allegations, the company’s executive vice president Ret. Judge Oscar P. Barrientos cited Article 10 of the World Trade Organization (WTO) General Agreement on Tariff and Trade.
Under WTO: “All information which is by nature confidential or which is provided on a confidential basis for the purposes of customs valuation shall be treated as strictly confidential by the authorities concerned who shall not disclose it without the specific permission of the person or government providing such information, except to the extent that it may be required to be disclosed in the context of judicial proceedings.”
“This is clearly a trial by publicity,” he said, adding that suppliers are not allowed to disclose the agreed value of the imported raw materials between the supplier and buyer until after the valuation is determined on a transaction value basis as required by the WTO, the Kyoto Convention and World Customs Organization, including adjustments to current inflation.
“Besides,” Barrientos said, “our records of tax liquidations with the Bureau of Customs are verifiable and Mighty has not been penalized for any wrongdoing.”
“It’s unfortunate that instead of just collating information for purposes of legislation, some sectors biased against Mighty have acted as inquisitor, prosecutor and judge rolled into one supposedly for the JCOC hearing on the review of the Sin Tax Law,” Barrientos pointed out.

Smear campaign against Mighty Corp

LOCAL cigarette manufacturer Mighty Corp. has slammed Philip Morris Fortune Tobacco Corp. (PMFTC) for its ”resurrected smear campaign” against it, saying the giant tobacco company is still bitter over its lost market share and revenues that resulted from the successful sin tax reform law.

“PMFTC’s pathetic attempts to resurrect its discredited campaign against Mighty show the depth of their desperation. We condemn in the strongest possible terms the irresponsible and malicious behavior of Philip Morris. This latest smear campaign is unacceptable and should be dealt with accordingly,” Mighty executive vice president Oscar Barrientos said in a statement.

Barrientos noted that PMFTC’s latest tirade against Mighty over alleged undervaluation of its imports was based on a study conducted by the Senate Tax Study and Research Office (STSRO) that is still incomplete and subject to final analysis.

It is for this reason, he said, that Rep. Raneo Abu of Batangas (2nd District), a member of the Joint Congressional Oversight Committee, had stated that only data submitted by concerned government agencies such as Bureau of Internal Revenue )BIR) , Bureau of Custom and National Tobacco Administration should be used by the oversight committee.

“What PMFTC conveniently did not disclose to the public is that the STSRO study used data culled from a report on alleged illicit tobacco trade conducted by the International Tax and Investment Center and Oxford Economics. This report was commissioned and funded by Philip Morris International [making] it self-serving,” Barrientos pointed out.

“This illicit tobacco trade report has since been debunked and discredited by tobacco control organizations and health groups as inaccurate and biased. Philip Morris exerted efforts to influence the government against adopting policies that affect its business,” he added.

“PMFTC’s latest statements are nothing more than a moro-moro [or] a farce [that they are] foisting in another attempt to have Republic Act (RA) 10351 amended. Their real agenda is to influence our government to amend the sin tax reform law because it leveled the playing field and took away their monopoly,” Barrientos said.

RA 10351, which was passed in 2011, reformed the country’s excise tax system and put in place a two-tier classification of cigarettes. The law was aimed at raising revenues and curbing smoking.

The law, according to the statement, has been “very successful” in boosting the government’s coffers.

The BIR reported that from January to September this year, incremental revenues from sin taxes hit P37.24 billion, higher than its P25.6-billion target.

Collections from tobacco products in the first three quarters hit P28.79 billion or 86.3-percent higher than the P15.45-billion target.

Meanwhile, the Department of Health reported that the sin tax law has been effective in reducing tobacco consumption among the youth and the poor, based on a survey by the Social Weather Stations.

“PMFTC accuses us of tax evasion as a reason for our pricing. Until the middle of this year, Mighty had been producing cigarettes exclusively in the low-price category. Our brands were priced higher than PMFTC’S low-price Jackpot brand, which is selling as of the third quarter of the year at P17.50 per pack. This is even lower than the excise tax and VAT combined of more than P18 per pack. We hope PMFTC can explain this to the public,” Barrientos said.

“Records will show that we have paid the corresponding taxes. This is why the BIR never charged us with tax evasion, because we paid the correct taxes,” he added.

Barrientos explained that they had settled all necessary duties with the Customs bureau for raw materials that it earlier imported for use in producing cigarettes for export but were subsequently used for domestic consumption.

“The Customs bureau audited us, assessed us for duties for our imports that were used for domestic consumption, and we settled whatever was assessed. PMFTC continues to muddle the facts to suit its position and support its attempts to have the sin tax law amended,” he said.

Mighty Corp on King and Chelsea premium cigarette

Mighty Corp., the oldest Filipino-owned tobacco company, has launched its premium brands King and Chelsea in a bid to firm up its position as the country’s second-biggest cigarette manufacturer.

“Our decision to enter the premium brand segment is part of the company’s thrust to reposition our brands and expand our reach into all segments of the market,” Oscar P. Barrientos, Mighty executive vice president, said.

“We hope to extend the reach of Mighty Corp. and strengthen our position as the top Filipino-owned tobacco company in the Philippines,” Barrientos added.

He said that both brands are premium in terms of smoke character. “But from the packaging and cigarette design, King is more traditional while Chelsea radiates unconventionality,” he explained.

The two premium brands are blended with the finest tobacco grades to give off a balanced taste and aroma. Both come in full flavor king size, lights king size and menthol 100s or a total of six different variants.

“One of our advantages is the smell, flavor and aromatic taste of our cigarettes that are also exceptionally smooth, mellow and attractively packaged,” Barrientos, a retired RTC judge, said.

Mighty’s premium brands will be categorized in the highest tax bracket for cigarettes.

“Our decision to expand our product lines is just part of our vision to become a major player in the market and show what a Filipino company can do,” Barrientos said.

The company was established in 1945 by businessman Wong Chu King with a small factory in Manila producing native cigarettes known as “Matamis.”

The company was renamed Mighty Corp. in 1985 and bought the trademarks of Alhambra Industries in 1993. It now operates a nine-hectare fully integrated manufacturing and processing plant in Malolos, Bulacan.

Mighty Corp. was able to build up its market share through an aggressive marketing push and heavy investments in research, development and production.

Allegations against Mighty Corp false, inaccurate

Allegations of undervaluation against Mighty Corp are highly speculative and inconclusive, according to the Bureau and Internal Revenue (BIR) and Senate Tax Study and Research Office (STSRO).

In the Oversight Committee Hearing held last Oct. 22, 2014, the government offices which monitor the implementation of the R.A 10351 or the Sin Tax Law presented the achievements and developments in their offices.
During the hearing, Sen. Vicente Sotto III, prior to asking questions, showed a presentation on Mighty alleging undervaluation that he said came from the STSRO.
However, the information in said report is considered for further analysis and therefore, not accurate.
BIR Commissioner Kim Henares, who was in the hearing, opposed the STSRO data which includes the discredited information on alleged illicit tobacco trade furnished by the International Tax and Investment Centre (ITIC) and Oxford Economics, as inaccurate, incomplete and not validated.
She also added that these data were commissioned and biased that may have been paid by PMFTC and that cannot be a basis against MC.
Based on ITIC’s Web site, one of its key officials is also a ranking official of Philip Morris International.
Rep. Raneo Abu of Batangas’ 2nd District, vice chairperson of the House Ways and Means Committee and a ranking member of Joint Congressional Oversight Committee (JCOC), has also mentioned that if the data or the information were not validated and biased, the BIR, BoC and the NTA should coordinate and these offices should be the one to submit the accurate, validated and unbiased information to the oversight Committee.
Partially reported to the oversight committee were inconclusive findings from Mighty’s suppliers, Eastman Chemical Company and Celanese Corp.
In dismissing the allegations, the company’s executive vice president Ret. Judge Oscar P. Barrientos cited Article 10 of the World Trade Organization (WTO) General Agreement on Tariff and Trade.
Under WTO: “All information which is by nature confidential or which is provided on a confidential basis for the purposes of customs valuation shall be treated as strictly confidential by the authorities concerned who shall not disclose it without the specific permission of the person or government providing such information, except to the extent that it may be required to be disclosed in the context of judicial proceedings.”
“This is clearly a trial by publicity,” he said, adding that suppliers are not allowed to disclose the agreed value of the imported raw materials between the supplier and buyer until after the valuation is determined on a transaction value basis as required by the WTO, the Kyoto Convention and World Customs Organization, including adjustments to current inflation.
“Besides,” Barrientos said, “our records of tax liquidations with the Bureau of Customs are verifiable and Mighty has not been penalized for any wrongdoing.”
“It’s unfortunate that instead of just collating information for purposes of legislation, some sectors biased against Mighty have acted as inquisitor, prosecutor and judge rolled into one supposedly for the JCOC hearing on the review of the Sin Tax Law,” Barrientos pointed out.

On Mighty Corp and PMFTC resurrected malicious campaign

 

LOCAL cigarette manufacturer Mighty Corp. has slammed Philip Morris Fortune Tobacco Corp. (PMFTC) for its ”resurrected smear campaign” against it, saying the giant tobacco company is still bitter over its lost market share and revenues that resulted from the successful sin tax reform law.

“PMFTC’s pathetic attempts to resurrect its discredited campaign against Mighty show the depth of their desperation. We condemn in the strongest possible terms the irresponsible and malicious behavior of Philip Morris. This latest smear campaign is unacceptable and should be dealt with accordingly,” Mighty executive vice president Oscar Barrientos said in a statement.

Barrientos noted that PMFTC’s latest tirade against Mighty over alleged undervaluation of its imports was based on a study conducted by the Senate Tax Study and Research Office (STSRO) that is still incomplete and subject to final analysis.

It is for this reason, he said, that Rep. Raneo Abu of Batangas (2nd District), a member of the Joint Congressional Oversight Committee, had stated that only data submitted by concerned government agencies such as Bureau of Internal Revenue )BIR) , Bureau of Custom and National Tobacco Administration should be used by the oversight committee.

“What PMFTC conveniently did not disclose to the public is that the STSRO study used data culled from a report on alleged illicit tobacco trade conducted by the International Tax and Investment Center and Oxford Economics. This report was commissioned and funded by Philip Morris International [making] it self-serving,” Barrientos pointed out.

“This illicit tobacco trade report has since been debunked and discredited by tobacco control organizations and health groups as inaccurate and biased. Philip Morris exerted efforts to influence the government against adopting policies that affect its business,” he added.

“PMFTC’s latest statements are nothing more than a moro-moro [or] a farce [that they are] foisting in another attempt to have Republic Act (RA) 10351 amended. Their real agenda is to influence our government to amend the sin tax reform law because it leveled the playing field and took away their monopoly,” Barrientos said.

RA 10351, which was passed in 2011, reformed the country’s excise tax system and put in place a two-tier classification of cigarettes. The law was aimed at raising revenues and curbing smoking.

The law, according to the statement, has been “very successful” in boosting the government’s coffers.

The BIR reported that from January to September this year, incremental revenues from sin taxes hit P37.24 billion, higher than its P25.6-billion target.

Collections from tobacco products in the first three quarters hit P28.79 billion or 86.3-percent higher than the P15.45-billion target.

Meanwhile, the Department of Health reported that the sin tax law has been effective in reducing tobacco consumption among the youth and the poor, based on a survey by the Social Weather Stations.

“PMFTC accuses us of tax evasion as a reason for our pricing. Until the middle of this year, Mighty had been producing cigarettes exclusively in the low-price category. Our brands were priced higher than PMFTC’S low-price Jackpot brand, which is selling as of the third quarter of the year at P17.50 per pack. This is even lower than the excise tax and VAT combined of more than P18 per pack. We hope PMFTC can explain this to the public,” Barrientos said.

“Records will show that we have paid the corresponding taxes. This is why the BIR never charged us with tax evasion, because we paid the correct taxes,” he added.

Barrientos explained that they had settled all necessary duties with the Customs bureau for raw materials that it earlier imported for use in producing cigarettes for export but were subsequently used for domestic consumption.

“The Customs bureau audited us, assessed us for duties for our imports that were used for domestic consumption, and we settled whatever was assessed. PMFTC continues to muddle the facts to suit its position and support its attempts to have the sin tax law amended,” he said.

Mighty Corp conducted training seminar for local tobacco employees

Thirty people, including 17 from local tobacco manufacturer Mighty Corp., have completed a proficiency-training seminar conducted by American experts on tobacco leaf utilization, leaf chemistry and leaf purchases.
The seminar, jointly conducted by MC and American Tobacco Associates (TA) Inc., also trained the participants on the US Leaf Standards Grading System for both Burley and flue-cured tobacco developed by the US tobacco industry in the early 1900s.
Bobby Wellons, tobacco training specialist from the US Department of Agriculture (USDA) conducted the US Leaf Standards Seminar on Burley and flue-cured together with TA’s vice president, Hank Mozingo.
According to retired Gen. Edilberto Adan, MC president, understanding leaf tobacco grading standards provides the foundation for learning and appreciating tobacco qualities and characteristics in the Philippines.
“More specifically,” he said, “the seminars helped those directly involved in tobacco manufacturing gain a better understanding of the unique characteristics of each US tobacco grade and which grades are more suitable for specific blend needs.”
While MC provided all the necessary on-site assistance and essentials, the TA group supplied all tobacco samples and training materials.
The short but comprehensive course was conducted at the new MC facility (Pavilion) located inside the factory grounds.
Aside from the MC participants, the others came from the National Tobacco Administration, Universal Leaf Philippines, Trans-Manila Inc., Continental Leaf, Prudence and WCD.
The first two days of the seminar focused on the Burley tobacco grades and characteristics. The remaining three days covered flue-cured.
At the end of the training course, each participant received a certification from USDA for completing the program.
Overall, the tobacco grading seminar has successfully served its purpose, providing participants with a deeper and a more extensive knowledge on the different sectors of the tobacco industry.

Mighty Corp on the smear campaign done by PMFTC

LOCAL cigarette manufacturer Mighty Corp. has slammed Philip Morris Fortune Tobacco Corp. (PMFTC) for its ”resurrected smear campaign” against it, saying the giant tobacco company is still bitter over its lost market share and revenues that resulted from the successful sin tax reform law.

“PMFTC’s pathetic attempts to resurrect its discredited campaign against Mighty show the depth of their desperation. We condemn in the strongest possible terms the irresponsible and malicious behavior of Philip Morris. This latest smear campaign is unacceptable and should be dealt with accordingly,” Mighty executive vice president Oscar Barrientos said in a statement.

Barrientos noted that PMFTC’s latest tirade against Mighty over alleged undervaluation of its imports was based on a study conducted by the Senate Tax Study and Research Office (STSRO) that is still incomplete and subject to final analysis.

It is for this reason, he said, that Rep. Raneo Abu of Batangas (2nd District), a member of the Joint Congressional Oversight Committee, had stated that only data submitted by concerned government agencies such as Bureau of Internal Revenue )BIR) , Bureau of Custom and National Tobacco Administration should be used by the oversight committee.

“What PMFTC conveniently did not disclose to the public is that the STSRO study used data culled from a report on alleged illicit tobacco trade conducted by the International Tax and Investment Center and Oxford Economics. This report was commissioned and funded by Philip Morris International [making] it self-serving,” Barrientos pointed out.

“This illicit tobacco trade report has since been debunked and discredited by tobacco control organizations and health groups as inaccurate and biased. Philip Morris exerted efforts to influence the government against adopting policies that affect its business,” he added.

“PMFTC’s latest statements are nothing more than a moro-moro [or] a farce [that they are] foisting in another attempt to have Republic Act (RA) 10351 amended. Their real agenda is to influence our government to amend the sin tax reform law because it leveled the playing field and took away their monopoly,” Barrientos said.

RA 10351, which was passed in 2011, reformed the country’s excise tax system and put in place a two-tier classification of cigarettes. The law was aimed at raising revenues and curbing smoking.

The law, according to the statement, has been “very successful” in boosting the government’s coffers.

The BIR reported that from January to September this year, incremental revenues from sin taxes hit P37.24 billion, higher than its P25.6-billion target.

Collections from tobacco products in the first three quarters hit P28.79 billion or 86.3-percent higher than the P15.45-billion target.

Meanwhile, the Department of Health reported that the sin tax law has been effective in reducing tobacco consumption among the youth and the poor, based on a survey by the Social Weather Stations.

“PMFTC accuses us of tax evasion as a reason for our pricing. Until the middle of this year, Mighty had been producing cigarettes exclusively in the low-price category. Our brands were priced higher than PMFTC’S low-price Jackpot brand, which is selling as of the third quarter of the year at P17.50 per pack. This is even lower than the excise tax and VAT combined of more than P18 per pack. We hope PMFTC can explain this to the public,” Barrientos said.

“Records will show that we have paid the corresponding taxes. This is why the BIR never charged us with tax evasion, because we paid the correct taxes,” he added.

Barrientos explained that they had settled all necessary duties with the Customs bureau for raw materials that it earlier imported for use in producing cigarettes for export but were subsequently used for domestic consumption.

“The Customs bureau audited us, assessed us for duties for our imports that were used for domestic consumption, and we settled whatever was assessed. PMFTC continues to muddle the facts to suit its position and support its attempts to have the sin tax law amended,” he said.

On undervaluation allegation against Mighty Corp

Allegations of undervaluation against Mighty Corp are highly speculative and inconclusive, according to the Bureau and Internal Revenue (BIR) and Senate Tax Study and Research Office (STSRO).
In the Oversight Committee Hearing held last Oct. 22, 2014, the government offices which monitor the implementation of the R.A 10351 or the Sin Tax Law presented the achievements and developments in their offices.
During the hearing, Sen. Vicente Sotto III, prior to asking questions, showed a presentation on Mighty alleging undervaluation that he said came from the STSRO.
However, the information in said report is considered for further analysis and therefore, not accurate.
BIR Commissioner Kim Henares, who was in the hearing, opposed the STSRO data which includes the discredited information on alleged illicit tobacco trade furnished by the International Tax and Investment Centre (ITIC) and Oxford Economics, as inaccurate, incomplete and not validated.
She also added that these data were commissioned and biased that may have been paid by PMFTC and that cannot be a basis against MC.
Based on ITIC’s Web site, one of its key officials is also a ranking official of Philip Morris International.
Rep. Raneo Abu of Batangas’ 2nd District, vice chairperson of the House Ways and Means Committee and a ranking member of Joint Congressional Oversight Committee (JCOC), has also mentioned that if the data or the information were not validated and biased, the BIR, BoC and the NTA should coordinate and these offices should be the one to submit the accurate, validated and unbiased information to the oversight Committee.
Partially reported to the oversight committee were inconclusive findings from Mighty’s suppliers, Eastman Chemical Company and Celanese Corp.
In dismissing the allegations, the company’s executive vice president Ret. Judge Oscar P. Barrientos cited Article 10 of the World Trade Organization (WTO) General Agreement on Tariff and Trade.
Under WTO: “All information which is by nature confidential or which is provided on a confidential basis for the purposes of customs valuation shall be treated as strictly confidential by the authorities concerned who shall not disclose it without the specific permission of the person or government providing such information, except to the extent that it may be required to be disclosed in the context of judicial proceedings.”
“This is clearly a trial by publicity,” he said, adding that suppliers are not allowed to disclose the agreed value of the imported raw materials between the supplier and buyer until after the valuation is determined on a transaction value basis as required by the WTO, the Kyoto Convention and World Customs Organization, including adjustments to current inflation.
“Besides,” Barrientos said, “our records of tax liquidations with the Bureau of Customs are verifiable and Mighty has not been penalized for any wrongdoing.”
“It’s unfortunate that instead of just collating information for purposes of legislation, some sectors biased against Mighty have acted as inquisitor, prosecutor and judge rolled into one supposedly for the JCOC hearing on the review of the Sin Tax Law,” Barrientos pointed out.