Cigarette Sales in June Decline to 10-Year Low

Jul. 11–Cigarette sales in June fell to their lowest point in 10 years as households have cut unnecessary spending because of the slowing economy, according to Suchon Watanapongvanich, managing director of the Thailand Tobacco Monopoly.

A public health campaign aimed at getting smokers to quit and curbing access to cigarettes for minors have also had an impact on sales.

The state-owned TTM reported June sales of 2.1 billion cigarettes, compared with 3.28 billion in the same month in 1996 and 3.8 billion in 1997, just at the start of the economic crisis.

Profits for the TTM this year are projected at 6.25 billion baht, down from earlier estimates of 6.58 billion, Mr Suchon said.

“In ten years, the TTM has never seen profits fall under target,” he said.

In terms of sales, the TTM has set a full-year target of 35.23 billion cigarettes, up slightly from last year’s sales of 34.15 billion.

Mr Suchon said the TTM would increase its focus on low-end brands in light of the slowing economy and decline in disposable income.

The TTM plans to scrap previous policies limiting low-end cigarette production at less than 30 percent of total production, a policy taken to avoid undermining the agency’s middle- and high-end products.

Mr Suchon noted that cigarette prices in general were expected to rise by at least one baht per pack as local administrations plan to raise taxes to boost revenues. The extent of tax increases, however, would depend on each jurisdiction.

According to the Thailand Development Research Institute, spending on unnecessary consumables such as cigarettes rose 2.8 percent in the first five months from the year before, compared with 6.2 percent growth year-on-year in the same period in 2004.

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