Mighty Corp's newest premium brand released

Expect competition in the local tobacco industry to heat up.

Mighty Corp., the oldest Filipino-owned tobacco company, has launched its premium brands King and Chelsea in a bid to firm up its position as the country’s second-biggest cigarette manufacturer.

“Our decision to enter the premium brand segment is part of the company’s thrust to reposition our brands and expand our reach into all segments of the market,” Oscar P. Barrientos, Mighty executive vice president, said.

“We hope to extend the reach of Mighty Corp. and strengthen our position as the top Filipino-owned tobacco company in the Philippines,” Barrientos added.

He said that both brands are premium in terms of smoke character. “But from the packaging and cigarette design, King is more traditional while Chelsea radiates unconventionality,” he explained.

The two premium brands are blended with the finest tobacco grades to give off a balanced taste and aroma. Both come in full flavor king size, lights king size and menthol 100s or a total of six different variants.

“One of our advantages is the smell, flavor and aromatic taste of our cigarettes that are also exceptionally smooth, mellow and attractively packaged,” Barrientos, a retired RTC judge, said.

Mighty’s premium brands will be categorized in the highest tax bracket for cigarettes.

“Our decision to expand our product lines is just part of our vision to become a major player in the market and show what a Filipino company can do,” Barrientos said.

The company was established in 1945 by businessman Wong Chu King with a small factory in Manila producing native cigarettes known as “Matamis.”

The company was renamed Mighty Corp. in 1985 and bought the trademarks of Alhambra Industries in 1993. It now operates a nine-hectare fully integrated manufacturing and processing plant in Malolos, Bulacan.

Mighty Corp. was able to build up its market share through an aggressive marketing push and heavy investments in research, development and production.

Mighty Corp approved the plan for cigarette stamps

Filipino-owned cigarette producer Mighty Corp. yesterday welcomed the early implementation of the Internal Revenue Stamp Integrated System (IRSIS) designed to further improve the collection of tobacco tax.
“Our contingency is now fully activated to meet the smooth implementation of the IRSIS which we drew up as early as six months ago in anticipation of its final approval by the finance department upon the recommendation of the BIR,” retired regional court judge Oscar P. Barrientos, MC executive vice president and spokesman, said.
Barrientos said Mighty is ready to comply with the new BIR regulation saying that some of their machines are equipped with stamp applicators.
The BIR has just released Revenue Regulation 7-2014 which imposes the affixture of Internal Revenue Stamps on imported and locally-manufactured cigarettes as well as the use of the IRSIS for the ordering, distribution and monitoring of tobacco manufacturers.
According to BIR chief Kim Jacinto-Henares, all cigarette companies have until the end of this year to sell or pull out of retail shelves those unstamped packets produced before implementation. 
All cigarettes whether for domestic sale or export shall be affixed with the new internal revenue stamps.
“This measure will strengthen our capacity to combat smuggling of tobacco products. We believe in implementing regulations with enough teeth to bite down on smugglers who are intent on depriving the nation of critical resources for greed and private gain,” Henares said.

Mighty Corp willing to reveal their marketing secrets

Mighty Corp. said Wednesday it is willing to reveal its trade secret on how it captured a large share of the low-end cigarette market if its foreign competitor stops bullying them and monopolizing the market.

“We’ve eaten their market because their people have not been working and that their down-the-line distribution is gone,” said MC executive vice president Oscar Barrientos, referring to Philip Morris-Fortune Tobacco Corp.

“Gone is the key word,” he said, “because while MC anticipated the possible effects of the Sin Tax Law and drew up its own strategy, its giant competitor relied mostly on its traditional marketing style of pushing premium and sub-premium brands and invariably neglected equally promoting its joint-venture partner Fortune Tobacco’s six different brands of P1 per stick cigarettes and, thus, many of its country-wide network also switched, largely for economic reason, to MC’s sales force which continued to expand.”

“You see it’s not only consumers shifting from premium and sub-premium brands which PMFTC dominated for many years but also some of their salesmen and other cigarette vendors to MC network now selling our products which admittedly are more tasty, smooth and aromatic,” the MC executive said, adding that in addition “we have an efficient workforce, no foreign obligations and most of all the ability to apply the knowledge and wisdom of comparative and managerial economics.”

“Not really so much on knowledge though because it’s practically unlimited. What is important is wisdom because it gives you the ability to perceive what is important and what is not in the crucial three stages of business operations which are sourcing of cheap but quality raw materials, manufacturing and marketing of products,” Barrientos said.

MC’s excise tax payments to the government increased 1,677 percent to P8.2 billion in just one year as against PMFTC’s only 110-percent increase for the same period after the effective implementation of the 2012 Sin Tax Law.

MC’s excise tax payment the previous year was more than P500 million.

MC’s shares in the market increased to more than 20 percent from a measly 3 percent as a result of the successful implementation the Sin Tax Law that saw the field leveled between local cigarette producers and PMFTC, which controlled 94 percent of the premium, sub-premium and low-priced brands.

“We are happy with the result of our intelligence research and business war-games which we had at the advent of the Sin Tax Law,” he said, adding that: “we had anticipated the advantages of the tax measure, prognosticating at the same that there was going to be a major shift in the smoking preferences of the majority of the Filipino consumers, either migrate to low-cost brand or entirely quit the vice or reduce the frequency of smoking for economic and health reasons.”

Farmers overwhelmed over Mighty Corp's assistance

FARMERS in Pangasinan and the Ilocos provinces have expressed relief that their tobacco leaves will have a sure market this year.

Expressing relief was Mario Cabasal, president of the National Federation of Tobacco Growers and Cooperatives (NFTGC) after learning that Mighty Corp has made commitments to initially buy at least 10 million kilograms of tobacco leaves at an average price of P70 per kilo and buy all the excess tobacco leaves that farmers could not sell to other buyers.
 “We limited to minimum areas fields planted to tobacco last year in anticipation of depressed demand due to the scheduled implementation of the sin tax,” Cabasal said. “good thing, some farmers were able  to sell part of their low-grade harvests to Mighty Corporation in 2013,” he pointed out.
“Now that we are assured of an alternative market, besides other tobacco companies, our members will again be inspired to devote larger areas to the cultivation of Ilocandia’s most important cash crop,” he said.
Fearing that tobacco prices and demand for the yellow leaf would dive as a result of the new excise tax law on cigarettes, many farmers in the Ilocos Region shifted to planting yellow corn, the only other cash crop that thrives in dry land where rainfall is scarce during the summer months. Profits from corn are, however, lower than tobacco.
Planting of the golden leaf started last month and selling the dry leaf often peaks just before the Holy Week.

“With Mighty’s assurance that the company will buy all the unsold tobacco harvested by farmers, we can also be sure that unlike in the past, prices will stay high even after the holiday season. Price cut downs on harvests after the Holy Week was an old practice of middlemen from Ilocos Norte to Pangasinan.

Churches in Visayas received help from MIghty Corp

The recent quake that destroyed or damaged historical churches in Bohol and Cebu has firmed up the advocacy of wholly-Filipino tobacco company Mighty Corp (MC) to build more churches in the country.

Retired Judge Oscar P. Barrientos, executive Vice President and spokesperson of MC, said in a statement that the destruction of churches during the quake in Bohol and Cebu has prompted MC to continue with its mission to strengthen the Filipino faith.

“The recent calamities that hit the country last year only strengthened the Filipino faith. Mighty Corp. will continue to build churches that Filipinos go to in their times of great trials,” said Barrientos in the statement.

The advocacy has prompted Church leaders, like Caceres Archbishop Rolando Tirona, to express support for MC in its struggle to clear its name amid charges of technical smuggling and tax evasion.

In a statement released by MC, Tirona was quoted as saying that MC “adheres strictly to the company’s commitment to its corporate social responsibility.”

The family that owns MC, the Wongchukings, has a record of building and repairing churches.

Last year, the Wongchuking Foundation Inc. (WFI), helped renovate the Diocesan Shrine of Immaculate Conception in





Naic, Cavite, and rebuild the Basilica Minore of Our Lady of Piat in Cagayan.

WFI, said the MC statement, also supports poor but deserving students through scholarship programs, with beneficiaries from the elementary to the college level.

The foundation has also initiated relief operations when

Bulacan, the host province of the MC tobacco factory, suffered heavy damage from monsoon rains. It also launched relief operations in Naic, Cavite when the town was hit by

Typhoon “Gener.”

Archbishop Emeritus Diosdado Talamayan, of the Archdiocese of Cagayan, also earlier expressed support for the Wongchuking family.

In a handwritten letter, Talamayan said, “For the past many years, I have personally known Mrs. Nelia Wongchuking. She, together with the entire family, are great devotees of Our Lady of Piat.”



Talamayan added that the family has built a chapel in Malolos, Bulacan as a gesture of their devotion.

Foreign investor willing to work with Mighty Corp, other tobacco firms

The British American Tobacco (BAT) has signified its willingness to partnering with another cigarette manufacturing company to cement a strong foothold in the country’s lucrative tobacco industry.

Robert Eugenio, BAT Philippines head of corporate and regulatory affairs, said yesterday that the Lucky Strike cigarette-maker is open to any “beneficial” opportunity in the Philippines.

Since BAT’s return to the Philippine market in 2012, the company’s market share grew at a snail’s pace despite a money-losing marketing strategy of selling imported cigarette packets below the economical price.

BAT, which unveiled a $200- million investment plan for the Philippines in 2012, currently has a weak distribution network in the country, and been incurring an additional cost for the importation of its Malaysia-made Lucky Strike and Pall Mall brands.

“In the process of running a business, we would look at whether partnering with another company would make sense than putting up our own manufacturing facility,” Eugenio said. “In the past, we partnered with La Suerte Cigar and Cigarette Factory, but it was terminated when we left in 2009.”

Meanwhile, industry sources said that BAT has already approached the Wongchuking family of Mighty Corp earlier this year to ask if the latter is open to any partnership.

“I’m not aware and involved in such a transaction,” Eugenio said when asked if BAT is in talks with the Bulacan-based cigarette company.

Sources said BAT wants a partnership with Mighty following its success in snatching up a substantial market share of local market leader PMFTC, a joint venture of LT Group’s Fortune Tobacco Company and Switzerland-based Philip Morris International (PMI).

Since the new excise tax regime took effect in 2013, PMFTC fought tooth and nail to protect its market position against Mighty, which has been very aggressive in offering cheaper alternatives to Lucio Tan and PMI’s premium cigarette brands.

The country’s second largest tobacco company, Mighty, known for the P1-a-stick cigarette, managed to raise its market share from a mere 3 percent in 2012 to nearly 35 percent last year.

However, Mighty’s success is hounded by accusations of tax dodging and smuggling.

Mighty Corp dedicated to help tobacco farmers

Farmers in the Ilocos Region and Cagayan Valley  have been assured of  brisk sale of tobacco leaves in 2014 following a bumper crop.
The assurance was made by  Oscar P. Barrientos, executive vice president of Mighty Corp, amid reports that the company’s share of the domestic market has dramatically risen from  five percent last year to 20 percent this year.
“We have earned our fair share of the market by making quality but affordable cigarettes that were smartly packaged, creatively and ingenuously sold to the mass market. That is the secret of our success in breaking the cigarette monopoly in this country and were mighty proud of our modest success coming from a home-grown and Filipino-owned cigarette company, said Barrientos, a retired judge.
With a bigger share of Mighty Corporation in the market today, we are giving the tobacco farmers a fair shake of our success by offering competitive prices to their crops,” he pointed out.
He stressed that over the years, Mighty has consistently championed the cause of the Filipino tobacco farmers by buying a larger share of the low-grade tobacco leaves at a good prices. This year, they bought even the low-priced tobacco leaves.

The domestic market for cigarettes became a virtual monopoly with over 90 percent of the market share when international tobacco giant Philip Morris acquired majority ownership of its lone competitor, Fortune Tobacco in 2010.

Mighty Corp talks about increase of market share

Bulacan-based Mighty Corp. will continue to eat up a slice of market share from rivals as the Wongchuking-owned tobacco firm believes it offers quality but cheaper alternatives to expensive cigarette brands, a company official said.

In a briefing late Thursday, Oscar P. Barrientos, Mighty executive vice-president, said smokers continued to shift from premium brands to cheaper alternatives this year as prices of cigarettes in the domestic market rose due to reformed excise tax law.

“Mighty’s market share is rising because of our very competitive price as well as quality of our cigarettes,” Barrientos told reporters. “Consumers are shifting from premium to low-premium brands after the new excise tax law.”

Barrientos said Mighty’s market share grew from 5 percent in 2012 to between 10 percent and 12 percent last year. The company earlier claimed its market share stood at 20 percent in 2013.

“For this year, we’re targeting to expand it by two percentage points, or 12 percent to 14 percent,” Barriento said. “The country’s tobacco industry is estimated to be more than 100 billion sticks annually.”

Barrientos said the company currently sells its Mighty brand for P26 to P27 a pack, while Marvel brand for P25 to P26 per pack, both higher by P5 compared with last year’s retail price, reflecting the P5 increase in excise tax rate this year.

However, some retailers sell Mighty brand at P23 per pack, while Marvel brand P18.4 per pack.

Barrientos, meanwhile, noted a slight decline in number of adult-smokers in 2013 based on the report of the Department of Health (DOH).

But despite the decline in smokers’ population, Barriento said Mighty is still positioning for the forthcoming unitary excise tax rate of P26 per cigarette packet by 2017.

Barrientos said Mighty expects demand for low-premium cigarette brands will decline in 2017, while premium brands may regain their popularity in the next three-years.

“That’s why we launched our premium brands King and Chelsea in a bid to firm up our position.” the company executive said. Mighty is currently the country’s second largest cigarette firm in terms of market share, next to PMFTC Inc.

Barrientos, meanwhile, just shrugged off Marlboro-maker and Lucio Tan’s foreign partner, Philip Morris International (PMI), accusations against Mighty of tax dodging.

“Those are baseless accusations by Philip Morris,” Barrientos said “But we’re ready to face investigations by authorities. Our factory is open to any inspection by Bureau of Internal Revenue (BIR) and Bureau of Customs.”

Barrientos also explained the company managed to lower its operational cost as it does not pay royalty to foreign headquarters, like in the case of PMFTC, and has no foreign consultants or employees.

He, meanwhile, revealed that Mighty’s manufacturing cost of cigarette per packet declined last year from 2012 as the company expands its market share.

“Our cost per pack of cigarette is around P3.5 to P4 [excluding taxes], this is cheaper than in 2012 when our market share was small. We managed to reduce the cost as Mighty expands market share due to economies of scale,” Barrientos explained.

Mighty Corp doubled its tobacco production up North

A cigarette manufacturing company announced it would double its purchase of tobacco from five million to 10 million kilos this year, which would boost the income of farmers in the area, the president of the National Federation of Tobacco Farmers Association and Cooperatives (NAFTAC) said.

NAFTAC president Mario Cabasal said the announcement of Mighty Corp was expected to break the farmers’ dependence on giant tobacco companies, who enter into contract with farmers to make them plant high nicotine varieties.

“The farmers now have a buyer for low-grade tobacco,” Cabasal said.

Mighty Corporation, a Filipino company, produces low-priced brand of cigarettes, which are popular among the masses. The company provided farmers 83 units of water pumps and 16 hand tractors.

The company also sponsored 100 college scholarship for children of tobacco farmers in La Union. It signed partnership agreements with farmers at the Hotel Ariana in Bauang, La Union last February 8.

Mighty Executive Vice President Oscar Barrientos said the company will compete with the giant tobacco companies in the purchase of tobacco, which they needed as cigarette filler.

Edgardo Zaragosa, Administrator of the National Tobacco Administration, welcomed the entry of Mighty Corporation in the market, “which is good because competition in tobacco trading will help farmers, especially if the price is right.”

“If Mighty is absent, we will be having problems selling tobacco,” Zaragosa said.

Mighty Corp's market share increase this year

Bulacan-based Mighty Corp. said Thursday it expects to widen its market share in the tobacco industry, as it continues to supply quality but cheaper alternatives to expensive cigarette brands.

Mighty executive vice-president Oscar Barrientos said the increase in market share was due to the shift of the local market from premium brands to cheaper alternatives.

“Mighty’s market share is rising because of our very competitive price as well as quality of our cigarettes,” Barrientos said.

 “Consumers are shifting from premium to low-premium brands after the new excise tax law,” he said.

Barrientos said Mighty’s market share grew from a range of 3 to 5 percent in 2012 to a range of 10 percent to 12 percent in 2013.

“For this year, we’re targeting to expand it by two percentage points, or to 12 percent to 14 percent,” Barrientos said.

He said the size of the tobacco market was more than 100 billion sticks annually and was continuously growing despite the increase in cigarette prices.

Barrientos said the company was now selling the Mighty brand for P26 to P27 a pack, Marvel brand for P25 to P26 a pack, which were both higher by P5 from last year’s retail price.

He said the adjustment reflected the P5 increase in excise tax rate this year. He said some retailers were still selling Mighty brand at P23 per pack and Marvel brand P18.4 per pack.