Tobacco at the lowest price on the market is growing strongly in Spain. The introduction of a system of minimum taxes makes it impossible to currently sell cigarettes for less than 3.92 euros per pack, but that has not prevented numerous brands from positioning themselves in the lowest segment. The banners that are sold for less than 4.2 euros per package have thus gone from representing just 8% of the market in April 2012 to now accounting for 16%.
Keep in mind that the price of the best-selling brands is higher in all cases. Marlboro is sold for example at 4.85 euros per pack; Chestefield and Camel at 4.55 euros and Lucky Strike, Fortuna or Winston at 4.45 euros. At a lower price but still above the lowest segment are Pall Mall and L&M, which are at 4.3 euros. The weighted average sale price is thus situated at 4.35 euros.
According to data from the Tobacco Market Commissioner, the British Imperial Tobacco controls a 43% share in this segment and has placed three of its brands at the top of the ranking. West Red Brooklyn, which is sold at 4 euros, has a share of 10.5%; Ducados Rubio 100’S by JPS, which is distributed at 4.1 euros, controls 8.1% and Fortuna 23, at a price of 4.75 euros (4.13 euros for every twenty cigarettes), another 8%.
Imperial Tobacco also has two other brands in the top ten of the lowest price segment: Fortuna 29, which is distributed at a price of 4.1 for 20 units, and West Brooklyn 100’s, which is marketed at 4 euros. Apart from Imperial Tobacco, the other companies have much smaller shares in the low-price segment.
The second position by market share is for Japan Tobacco International (JTI), with a 13% share, the third for British American Tobacco (BAT), with 10% and the third for Philip Morris, which has 7%.
In Spain, to prevent brands from being marketed at low prices, a double minimum tax system has been established. Thus, in practice, brands that sell for less than 3.92 euros are obliged to pay at least 2.76 euros and those that sell for less than 4.1 euros must pay a minimum of 2.57 euros. As a result of a sentence from the Luxembourg Court of Justice at the end of last year, Spain is obliged, however, to end this system and impose a single minimum, something that the Government has not done, leaving it pending for the next legislature .
Now depending on where the threshold is set, the price of tobacco may or may not rise and that is where a battle has broken out between the companies. Those that sell the cheapest tobacco, like Imperial, want to maintain the current system, while the rest try to raise prices.
Facebook Comments
Disqus