1 of 2
Woman selling tobacco products inYangon, Myanmar including Red Ruby, the leading brand inthe country.
2 of 2
Woman selling tobacco products and other goods at an open air market in Shan State, Myanmar near Inle Lake.
*This story was written before the mililtary crackdown by Myanmar’s ruling junta and imposition of martial law in March 2021.
By Dr. Iqbal Lambat – c.e.o. Star Agritech International
Tobacco Asia’s international correspondent spent some 10 days in 2020 (pre-Covid-19), visiting Himalayan kingdoms and people’s republics in the Mekong delta, going off the beaten path to find out about the mystique and magic of the small countries of Bhutan, Myanmar, and Nepal, from a geopolitical perspective as well as a tobacco-related perspective. In this first article, we examine the Republic of the Union of Myanmar, formerly known as Burma.
Myanmar, a country of 53 million inhabitants with Yangon as its capital, has been center stage from the Southeast Asian perspective for many reasons. Firstly, it gained its independence from the British in 1948. However, in the short period of independence, Myanmar was progressively overtaken by its brutal military junta in what was an overly oppressive military state from 1962-2011. With the freeing of Burma from the British, the country descended into political chaos as Aung San Suu Kyi and her Democratic party fought tooth and nail against the military junta to take control of the country.
Sadly, in a worldwide display, Aung San Suu Kyi was placed under house arrest for some 21 years. During that time, she received the prestigious Nobel prize for peace, much coveted at that time. After her release into civilian society, she campaigned successfully to become Myanmar’s next leader but found herself in a power-sharing relationship with the ruling military. With limited freedoms, her impact on the political and economic front has been lackluster and nowhere more significantly displayed than in her lack of support for the Rohingya Muslim minority who were the subject of genocide (ethnic cleansing) by the military junta in 1918 and continuing.
At time of writing this story, the Criminal Court of War Crimes in the Hague issued a ruling to protect the 700,000 Rohingya Muslims in Myanmar from further genocidal attacks. Aung San Suu Kyi was a key witness in this trial defending (probably in a show of alignment with the military, to show unity) the military junta by stating that no genocide had occurred. How sad for one of the best examples of the freedom of human rights to become tainted under the military junta.
Aung San Suu Kyi – Myanmar’s Iron Lady
Against this background, let us evaluate the state of the tobacco market. The total number of smokers in Myanmar is estimated at 10 million, mostly male. Total cigarette consumption is estimated at 12 billion sticks per annum (100,000 master cases per month). The market is essentially Virginia blend, mostly in king-size format.
The main participants in the market are Virginia Tobacco Company, which is majority-owned by Myanmar Economic Holding (MEHL), one of two military-controlled conglomerates, followed by British American Tobacco (BAT), to a significantly lesser extent Japan Tobacco International (JTI), and some local private players. While BAT has lobbied hard at political and private levels, it has not been successful in taking market leadership. Rather, the military junta, with majority control of Virginia Tobacco Company, secured a 40% plus market share with their brand Red Ruby. Other brands on the market are Winston, Mevius, Dunhill, many local brands, and the sporadic presence of Marlboro. For PMI, this country is not friendly to bonafide American blends.
It’s fair to state that tobacco is consumed here in alternative forms (larger segments than cigarette consumption), notably chewing. The main products here are pan, betel nut, and various varieties of these.
Cigarette product pricing is affordable with premium cigarettes at MMK2,000 (US$1.75) per pack of 20, mid-priced cigarettes at MMK1,000 per pack, and value-priced cigarettes at MMK500 per pack. With Red Ruby at MMK500 per pack and at the most popular price class, it is strongly positioned to control market dynamics.
Distribution is fragmented and consists of some (few) mini-market type outlets where brands are visible, several small grocery type outlets, and a multitude of mobile tabletop vendors. The rather small number of brands make all brands immediately visible. Regulation is very present in that cigarette packs must carry on the front panel, back panel, and both side panels health warnings that cover 80% of all respective surfaces. In addition, health warnings must use draconian pictograms representing 50% of the front and back panel (these have proven to be of little deterrence in the battle to curb smoking among Myanmar’s smokers).
Myanmar’s administrative capital, Nay Pyi Taw, designated no-smoking areas as part of its effort to control cigarettes and tobacco. The Nay Pyi Taw Council said smoking is prohibited in hospitals and office compounds, air-conditioned restaurants, teashops, drink shops, and bars, department stores, grocery stores, and private markets. Also included in the no-smoking zones are food courts, and teashops and drink shops in markets that have roofs and walls, in other words – covered. Children’s playgrounds, public halls, classrooms, teaching and private tuition facilities, guesthouses, and boarding houses are also no-smoking areas. The Council also issued regulations that cigarettes must not be sold within 100 feet of a school, that cigarette packs must contain no more and no less than 20 cigarettes and that 18 is the minimum age to buy cigarettes.
While a relatively small cigarette market, Myanmar’s market is poised for growth as livelihoods improve, disposable income increases, and alternative tobacco consumers switch to the convenience of factory -manufactured cigarettes.
Postscript – Myanmar Today
On February 1, 2021, Military General Min Aung Hlaing announced another takeover of the country, discrediting last November’s 85%+ electorate landslide victory of Aung San Suu Kyi’s party. Initial civilian response has been swift and significant with much of the country in constant protests and strikes. International response has also been swift with stark warnings of sanctions that will push Myanmar back into “isolationism”. Clearly a rocky road ahead for this Mekong country.