MANILA, Philippines - Higher "sin taxes" appear to have dampened demand for Marlboro and Fortune cigarettes this year, as Philip Morris International Incorporated (PMI) said its sales volume in the Philippines fell 21% in the first nine months.
PMI, Lucio Tan's partner in PMFTC (Philip Morris Fortune Tobacco), said it saw a bigger drop in sales volume in the first 9 months of the year, compared to the industry's 6.7% decline, as smokers reduced purchases or switched to other brands.
"(This is) primarily reflecting the unfavorable impact of the disruptive excise tax increase in January 2013," PMI said.
The Sin Tax Reform Act, which sets higher levies on tobacco and alcohol products, took effect on January 1, 2013.
The tobacco firm also noted its market share has fallen to 77.2% as of September, from 90.8% a year ago.
"PMI's market share in the [third] quarter decreased by 13.6 points to 77.2 percent primarily due to downtrading to competitors' brands," it added.
PMI said its market share of its premium brand Marlboro dropped by 5.9 points to 15.3%, while share of low-priced Fortune fell by 22.6 points to 27.5%.
The company said the decline of Marlboro and Fortune's market share was partially offset by gains from its other low-priced brands.