Major Pakistani cigarette manufacturers witness decline in sales as smokers opt for cheap alternatives

A Pakistani resident smokes a cigarette at a bus stop in Karachi on May 30, 2014. (AFP/File)
Short Url
Updated 31 May 2023
Follow

Major Pakistani cigarette manufacturers witness decline in sales as smokers opt for cheap alternatives

  • Pakistan Tobacco Company, Philip Morris say smokers are unable to purchase cigarettes after 200 percent excise duty
  • The high cost of legitimate brands has increased the share of illicit sector by 43 percent from 37 percent in January

KARACHI: Pakistani tobacco companies have witnessed a significant drop in their sales and production as smokers turn to illegal cigarettes following a sharp increase in prices due to the imposition of a 200 percent excise tax, companies and retailers said on Tuesday.

In February, the government introduced the highest-ever excise tax increase for the tobacco industry, raising the Federal Excise Duty (FED) on tier-1 brands by 153.8 percent to Rs16,500 per thousand cigarettes, and by 146.3 percent to Rs5,050 per thousand cigarettes on tier-2 brands.

In Pakistan, where an estimated 17 million adults are smokers, three major cigarette manufacturers hold more than 80 percent of the market share based on the brands commonly used by people.

Pakistan Tobacco Company (PTC), Philip Morris International Pakistan, and Khyber Tobacco Company have market shares of 60.3 percent, 22.6 percent, and 4.9 percent, respectively, while the remaining firms have a 12.2 percent market share, according to the Social Policy and Development Center (SPDC).

“Since June 2022, the tobacco industry has witnessed three excise increases resulting in an overall increase of over 200 percent,” PTC said in an emailed response to Arab News queries on Tuesday.

“In February 2023 alone, the Federal Excise Duty (FED) on cigarettes was increased by approximately 150 percent,” it added. “This increase in excise led to an increase in prices by the legitimate players of the tobacco sector.”

Other cigarette manufacturers also said the tax hike had severely affected their sales, as financial constraints compelled smokers to seek other options, including products that were marketed without paying any duty.

Philip Morris (Pakistan) mentioned a decline of about 70 percent in sales and a 60 percent in production volume in the months of March and April.

“This downward trend is expected to persist in the coming months due to the rise in illicit cigarettes,” the manufacturer said in a statement issued on Monday.

PTC stated that cigarette consumption remained the same in the country, although people were finding it difficult to purchase legitimate cigarette brands due to the prevailing economic situation and were forced to switch to illicit brands.

“These brands sell below the government-mandated Minimum Legal Price (Rs127.4),” it added. “This phenomenon has increased the illicit sector to 43 percent of the total industry from approximately 37 percent in January 2023.”

Inflation in the South Asian state remains stubbornly high due to spikes in the cost of food and energy. The country recorded a multi-decade high inflation rate of 36.4 percent in April 2023, according to the Pakistan Bureau of Statistics (PBS), which also showed that cigarette prices increased by 159.89 percent on an annual basis in the same month.

The rising cost of cigarettes is also impacting the livelihoods of over half a million retailers across the country.

“The price of cigarettes has increased by over 100 percent since February this year, and people are switching to illegal brands,” said Hajji Muhammad Mubeen Yusuf Butt, President of the All-Pakistan Union of Pan Cigarette Beverage Retailers, in an interview with Arab News.

“Consumers are demanding cheap cigarettes, which are mostly illicit. Over 0.7 million retailers can’t afford to sell illegal cigarettes openly [due to legal implications],” he continued, acknowledging that some individuals, but not retailers, were involved in the illicit trade. “They make these sales secretly.”

Pakistani manufacturers called for FED rationalization, stating that the illicit trade of cigarettes would also impact the government’s revenue collection.

“The government is expected to lose over Rs200 billion in terms of revenue due to the illicit trade in cigarettes,” PTC said.

Pakistan has introduced and implemented the Track and Trace System (TTS) to monitor production and sales in the sugar, tobacco, and fertilizer sectors.

“Track and Trace is a good initiative of the government that must be implemented at all cigarette manufacturing facilities across the board, including those in Azad Jammu and Kashmir (AJK),” said an official of the Federal Board of Revenue (FBR) who declined to be named, as he was not authorized to speak to the media, in an interview with Arab News.

“TTS has produced the desired results in terms of enhanced revenue generation,” he added.

The FBR spokesperson did not respond to queries regarding the agency’s actions against the sales of illicit cigarettes in the country.
 


Pakistan PM discusses trade, investment and connectivity with Central Asian leaders on SCO summit margins

Updated 4 sec ago
Follow

Pakistan PM discusses trade, investment and connectivity with Central Asian leaders on SCO summit margins

  • Top officials from China, Russia, India, Iran and several Central Asian states are attending the two-day summit in Islamabad
  • On Tuesday, PM Shehbaz Sharif warmly greeted the visiting dignitaries, including Indian FM, at a dinner he hosted in their honor

ISLAMABAD: Prime Minister Shehbaz Sharif on Tuesday met with Central Asian leaders and discussed trade, investment and regional connectivity on the sidelines of a two-day Shanghai Cooperation Organization (SCO) summit in Islamabad, Sharif’s office said.
The prime ministers of China, Kyrgyzstan, Tajikistan, Russia, Belarus, Kazakhstan and Uzbekistan as well as Iran’s first vice president and the Indian external affairs minister are in Islamabad to attend the summit on October 15-16.
The Pakistani government has declared a three-day holiday in the federal capital of Islamabad since Monday, with schools and businesses closed to ensure security of foreign leaders attending the high-profile regional summit.
In a meeting with Kazakhstan PM Olzhas Bektenov on Tuesday, Sharif reaffirmed Pakistan’s commitment to work with all member states in advancing the SCO’s principles and purposes, according to the Pakistan PM’s office.
“Noting the warm and excellent bilateral relations between the two countries, Prime Minister Sharif emphasized the need to enhance trade and investment, while also focusing on regional connectivity and security,” Sharif’s office said in a statement.
To achieve this shared objective, he stressed the need to maintain regular and high-level contacts, including through institutional mechanisms of bilateral engagement.
In his meeting with Tajikistan PM Qohir Rasulzoda, the Pakistan premier said both countries should further cement cooperation across all spheres of shared interest, according to Sharif’s office.
He conveyed Pakistan’s strong desire to strengthen ties with Kyrgyzstan in trade and investment during a meeting with Akylbek Japarov, chairman of the Cabinet of Ministers of the Kyrgyz Republic. In his meeting with Turkmen Foreign Affairs Minister Rashid Meredov, Sharif welcomed the participation of Turkmenistan in the summit as a “special guest.”
During the meetings, Central Asian leaders congratulated the Pakistani premier on the successful organization of the SCO summit and lauded Pakistan’s positive role as the SCO chair, Sharif’s office said.
Pakistan wants to position itself as a regional trade hub and to leverage its strategic geopolitical position and enhance its role as a pivotal trade and transit hub connecting China and Central Asia with the rest of the world. In recent months, there has been a flurry of visits, investment talks and economic activity between Pakistan, China and Central Asian states, including Uzbekistan, Azerbaijan, Tajikistan and Turkmenistan.
In a bilateral meeting with Belarusian PM Roman Golovchenko, Sharif noted that regular high-level exchanges had added positive momentum to the cordial ties between the two countries.
“This momentum needed to be sustained so as to realize the full potential of bilateral cooperation, particularly in the areas of trade, investment, agricultural machinery and joint production of tractors and connectivity,” he was quoted as saying.
On Tuesday, Sharif also hosted a dinner in honor of the visiting foreign dignitaries, wherein he was seen greeting and shaking hands with the attendees, including Indian External Affairs Minister Subrahmanyam Jaishankar.
Sharif is due to preside over a meeting of the SCO Council of Heads of Government and deliver the opening remarks on Wednesday, followed by statements from leaders of participating countries during the session, according to the Pakistani foreign office. The documents reflecting outcomes of the meeting will also be signed during the session, which will conclude with Sharif’s closing remarks.
Foreign office said Pakistan’s Deputy Prime Minister Ishaq Dar and SCO Secretary General Zhang Ming will interact with media to share a communiqué after the concluding session on Wednesday.
Pakistani authorities have locked down the capital to ensure security of foreign leaders attending the SCO summit. The government has deployed troops and blocked key roads, announcing alternate routes for the residents.


Ghulam says ‘wait is over’ after century on Pakistan debut

Updated 15 October 2024
Follow

Ghulam says ‘wait is over’ after century on Pakistan debut

  • The 29-year-old made 118 on the opening day of the second Test, anchoring Pakistan to 259-5
  • Since his first-class debut in 2013, Ghulam has piled on runs in all three formats of the game

MULTAN: One of a dozen brothers, Kamran Ghulam got used to waiting his turn for a bat as a child.
He then had to wait for his Pakistan debut, but it all seemed worth it on Tuesday when he scored a century against England in Multan.
The 29-year-old debutant made a terrific 118 on the opening day of the second Test, anchoring the hosts to 259-5.
Dawood, one of the 10 older brothers, said Ghulam had learnt to be patient from very early on.
“We used to play cricket at our village and would not allow Kamran to bat on the pretext that ‘you are very small’,” Dawood told AFP from Peshawar, in Pakistan’s northwest, on the phone.
“He was a good fielder so we used to order him to field only and like a very obedient boy he would follow, and that patience has seen him through difficult times.”
Six of the brothers played for the same club in their village in Khyber Pakhtunkhwa and would often be at loggerheads over who should bat first.
“It was normal to have a fight, but at the end of the day we always returned home happy and today we are at the height of our happiness,” said Dawood, 40.
“Our late father always wanted Ghulam to become a good player but he died 22 years ago.
“He would have been the happiest in the family.”
Since his first-class debut in 2013, Ghulam has piled on runs in all three formats of the game with his best coming in 2020-21 when he amassed 1,249 runs in 11 domestic matches.
That broke a 36-year record.
Ghulam was included in Pakistan’s preliminary squad for a home series against South Africa in 2021 but was not given a chance.
He said he knew his opportunity would come some day — as long as he was patient.
“They say the fruit of patience is always sweet and it is proved today,” said Ghulam after his opening-day heroics in Multan.
“I was eager for my chance and had always thought whenever it will come I will make it worthwhile.”
Last year Ghulam was in Pakistan’s squad against New Zealand in a one-day international in Karachi but he only got a chance as a substitute for Haris Sohail, who suffered concussion.
Ghulam’s full Test debut finally came as he replaced out-of-form Babar Azam following Pakistan’s innings defeat last week.
“There was pressure of replacing Azam so I had to do something special,” said Ghulam.
“So I am delighted that I am successful in achieving a feat and my wait is over.”


Pakistan Navy cadets win silver medal in international sailing competition in Brazil

Updated 15 October 2024
Follow

Pakistan Navy cadets win silver medal in international sailing competition in Brazil

  • A total of nine teams from around the world competed in the J24 boat category
  • Pakistan Navy team captain dedicates the victory to quality training by instructors

ISLAMABAD: Cadets of Pakistan Navy’s sailing team won the silver medal by securing second position in the 79th International Naval Academy Sailing Competition held in Rio de Janeiro, Brazil, Pakistan Navy said on Tuesday.
A total of nine teams from around the world competed in the J24 boat category, according to the Directorate General Public Relations (DGPR) of Pakistan Navy.
J24 is the world’s most popular keelboat class used in almost all major international championships, including the PanAm Games, World Sailing Games and Nations Cup.
“The PNA [Pakistan Naval Academy] team captain dedicated the victory to the quality training,” the DGPR said in a statement.
The participating teams included cadets from naval academies of Pakistan, Brazil, China, Italy, Portugal, Argentina, Colombia, Peru and India, according to the DGPR.
“After securing first position during International Sailing Championship in Sri Lanka earlier in August this year, this is consecutive second extraordinary performance at international level during last three months by cadets of PNA,” it said.
Chief of the Naval Staff, Admiral Naveed Ashraf, congratulated the victorious Pakistan Navy team and lauded the efforts of PNA faculty and instructors for the brilliant performances internationally.


India-Canada relations reach historic lows as top diplomats expelled

Updated 15 October 2024
Follow

India-Canada relations reach historic lows as top diplomats expelled

  • Relations fraught since the murder of a Sikh separatist leader in British Columbia last year
  • Canadian PM says Indian officials identified as ‘persons of interest’ in the assassination plot

NEW DELHI: Relations between India and Canada have reached a historic low as the countries expelled each other’s diplomats in an ongoing row over the killing of a Sikh separatist activist on Canadian soil.

Canadian Prime Minister Justin Trudeau accused India’s government on Monday of “supporting criminal activity against Canadians here on Canadian soil,” and the country’s Foreign Ministry announced the expulsion of six Indian diplomats, including the high commissioner.

The ministry said Canadian police had gathered evidence, which identified them as “persons of interest” in last year’s killing of Hardeep Singh Nijjar, who was gunned down in Surrey, British Columbia.

India immediately rejected the accusations as absurd, and its Ministry of External Affairs said it was expelling Canada’s acting high commissioner, his deputy, and the embassy’s four first secretaries.

Before the announcement, it also summoned the Canadian charge d’affaires and said it was withdrawing its high commissioner and “other targeted diplomats,” contradicting Canada’s statement of expulsion.

“Prime Minister Trudeau has been making these public statements repeatedly, but the evidence that he claims to possess is not available to us so we cannot make any kind of a judgment,” Dr. Ajai Sahni, executive director of the Institute for Conflict Management in New Delhi, told Arab News.

“This is the first time the relationship is so low … It has created a lot of problems and it has done damage to relationships between the two countries for the time being.”

This is not the first time India-Canada relations have been strained. In 1974, after India conducted its first nuclear weapon test, it drew outrage from Canada, which accused it of extracting plutonium from a Canadian reactor, a gift intended for peaceful use.

Ottawa subsequently suspended its support for New Delhi’s nuclear energy program.

“The relationship was also low in the 1980s with the hijacking of an Indian Airlines plane and the bombing of the plane, in which many people died,” said Prof. Ronki Ram, political science lecturer at the Punjab University.

The explosion from a bomb planted by Canada-based militants killed 329 people — the worst terrorist attack in Canadian history. India had warned the Canadian government about the possibility of attacks and accused the Canadian Security Intelligence Service of not acting on it.

But the current strain in relations is the first in which diplomats have been withdrawn.

“This is the first time that the relationship has gone down so low,” Ram said.

“Allegations and counter-allegations will have serious implications both internationally and domestically. The Indian government should look into the allegations and try to address them.”

Nijjar, a Sikh Canadian citizen, was gunned down in June 2023 outside a Sikh temple in Surrey, which has a significant number of Sikh residents. He was an outspoken supporter of the Khalistan movement, which calls for a separate Sikh homeland in parts of India’s Punjab state.

The movement is outlawed in India, considered a national security threat by the government, and Nijjar’s name appears on the Indian Home Ministry’s list of terrorists.

Canada has the largest population of Sikhs outside their native state of Punjab — about 770,000 or 2 percent of its entire population.

“Many Panjabi diaspora are in Canada, and a mini-Punjab has been established there,” Ram said.

“The government is taking an electoral interest in the landscape of Canada also. Those things are becoming very critical.”


Pakistan president hosts luncheon for Chinese PM, calls for further strengthening of ties

Updated 15 October 2024
Follow

Pakistan president hosts luncheon for Chinese PM, calls for further strengthening of ties

  • The two sides reaffirmed their commitment to deepening bilateral strategic cooperation in key sectors
  • President Zardari offered condolences over the killing of Chinese nationals in a suicide attack in Karachi

ISLAMABAD: President Asif Ali Zardari said on Tuesday Pakistan and China could further strengthen bilateral relations while hosting a luncheon in honor of Chinese Premier Li Qiang, with Prime Minister Shehbaz Sharif in attendance.
China and Pakistan have enjoyed a longstanding relationship, marked by strategic cooperation in trade, defense and infrastructure development. The China-Pakistan Economic Corridor (CPEC), a centerpiece of China’s Belt and Road Initiative, aims to transform the region’s economic geography by enhancing physical connectivity and positioning Pakistan as a key player in Central Asian trade through its sea routes.
As both nations embark on CPEC 2.0, the focus has shifted toward industrialization, socio-economic development and energy projects, reflecting their mutual quest to further expand bilateral cooperation and boost regional integration.
“During the meeting, both sides reaffirmed their commitment to deepening bilateral strategic cooperation in key sectors such as economy, investment and regional connectivity,” the state-owned Associated Press of Pakistan (APP) news agency said.
“The President said that friendship with China is a cornerstone of Pakistan’s foreign policy and stressed the importance of exploring new avenues for collaboration,” it added. “He noted that there is still room to further expand Pakistan-China relations.”
The Chinese premier, along with ministers and government officials, arrived in Pakistan on Monday.
His visit comes at a time when Pakistan is hosting the two-day Shanghai Cooperation Organization (SCO) Summit.
The Pakistani president expressed his heartfelt condolences over the killing of two Chinese nationals in a deadly suicide attack in Karachi in the lead-up to the summit, calling it a painful incident for the entire nation.
He maintained that enemies of Pakistan-China friendship were targeting Chinese citizens to damage bilateral relations and disrupt CPEC projects, adding they would not succeed in their plans.
He also assured the Chinese premier Pakistan was committed to ensuring that the perpetrators of the crime were brought to justice.