Economy’s Pain Points Tightening Noose Cigarette Industry in Pakistan: Study

Thu May 09 2024
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ISLAMABAD: Ipsos Pakistan, launched its research study titled, ‘Pakistan Cigarette Market Assessment 2024’ on Thursday in Islamabad.

The report represented a comprehensive survey of more than one thousand retail outlets across all four provinces of Pakistan, thoroughly covering both urban and rural areas. Key findings underlined a major shift in market dynamics, including a projected decline in the market share of legitimate cigarette brands and an increase in the presence of illicit brands, severely affecting the national revenue and sustainability of legitimate businesses.

Easy availability of low-priced smuggled and tax-non-paid cigarettes all across the country, non-compliance with the Track & Trace system, cigarette sales below the minimum legal price (MLP), price disparities and numerous other crises had not only put down the compliant cigarette industry to its knees but was also denting national exchequer with an annual loss of 300 billion rupees.

While visiting retail outlets in these areas, Ipsos checked the availability and rates of tax-non-paid and smuggled cigarette brands and estimated the market shares, compliance of Track & Trace, minimum legal price, price disparities and new phenomena in the market.

Later Ipsos also presented an analysis of the information collected from the markets of these areas. Moreover, in the wake of increased enforcement, an observation study was also conducted across the sample to corroborate the findings.

Year on year, six brands have been included in the Track and Trace list however there have been a number of instances where the same brands were being sold without stamps.  However, the failure to implement Track and Trace is evident as thirty-seven new brands, bringing the total to 165 brands, in the market do not have track and trace stamps, the report noted.

104 Cigarette Brands Sold Below MLP in Pakistan

While exposing another failure of the concerned authorities, the research mentioned that in Pakistan nearly 104 cigarette brands were being sold below the MLP while forty-five smuggled brands were being sold above the MLP. 53 percent of the cigarette brands available in the market are being sold below the MLP, the study added.

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