India
An increase in value-added tax (VAT) on cigarettes from 14.5% to 20% in Andhra Pradesh, one of the 28 states in India, was cited by the country’s cigarette producing giant ITC as the reason for its latest increase in prices for its medium-range brand Wills Navy Cut that came on the heels of a price hike for its premium brand, Classic, in Tamil Nadu a month before.
VAT on cigarettes increased in Tamil Nadu from 12.5% to 20% and ITC responded by implementing a 10% increase on its Classic brand for a pack of 10 cigarettes.
The new round of price increases also came as a result of legislation changes in West Bengal, where the VAT on cigarettes is now 30%. Nevertheless, industry insiders say that its intelligent pricing policy has helped ITC keep considerably ahead of its rivals.
Wills Navy Cut brings 11% of ITC’s revenue, followed by Classic with 10%. Its most profitable brand is Gold Flake which rakes in about 43% of the company’s total revenue. The remaining 36% is shared by Bristol, Capstan, Scissors, Burkley, Benson & Hedges and others.
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Tobacco Asia 
Industry Spotlight ITC hikes prices
Industry Spotlight ITC hikes prices
ITC hikes prices
Quarter 1, 2012
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