Mighty Wongchuking vows to Help increase Farmers' income in 2014
The Filipino-owned Mighty Corporation (MC) said in a statement that thousands of farmers based in Pangasinan, Ilocos province, and the Cagayan Valley region will benefit from its increasing demand of t0b*cco leaves starting January 2014. Mighty Corp. owner, Wongchuking, assured the local farmers that its manufacturing plant in Bulacan will increase its production output, thus, more t*bacc0 leaves will be acquired from them this year.
Ernesto Calindas, President of the National Federation of Tobacco Growers and Cooperatives Inc. said Mighty corp. is the only company who offers competitive price for low-grade tob*cc0 leaves in the country. The value ranges from Php45 per kilo for the low-end leaves to Php80 for top quality leaves,” he recalled.
“This time we have greater assurance and more reasonable pricing will be now expected with Mighty Corporation’s announcement that it will buy more t0b*cco leaves in 2014,” Calindas added.
The demand for local raw materials drastically increased due to the greater market share of MC in 2013. Reports revealed that it covered 20 percent of the local market share from a minimal 3-5 percent coverage in 2012. According to the company's officials, the extensive growth of their market share was accounted to the low-priced cigarettes, which became a major hit last year following the implementation of the new six tax code.
Amid the announcement of the goods news to the tob*cc0 farmers, the company is also facing controversies over the alleged and sensationalized sin tax scandal driven by established competitors, who requested a probe from the House of Representatives due to Mighty Corp's sudden rise as a tob*cc0 player.
In response to the investigation, Wong Chu King declared that Mighty Corp. would fully cooperate with the government officials, who are assigned to examine the allegations against the company.
Competition of Low-priced Cigarettes
As opposed to malicious reports, Mighty Corp. is not the only company who sells cheap one-peso-per stick of cigarettes. A report by Manila Bulletin indicated that the market leader PMFCT Inc., the merged entity of Philip Morris Philippines Manufacturing and Lucio Tan-owned Fortune Tob*cc0, has a very close price to Mighty cigarettes.
In its official pricelist dated November 13, 2013, the cigarette maker had a notable price increase of Php147 to Php183 (20-sticks) on popular brands Mighty Filter Kings and Mighty Menthol, while PMFTC sells Jackpot cigarettes at a wholesale price of Php192 per ream or P19.2 per pack of 20’s.
Just an FYI, the introduction of re-branded cigarettes, including the ones from the major players, were subject to low-level tax classification upon filing an application to the Bureau of Internal Revenue(BIR). Hence, cheap cigarettes sold at one-peso-per stick remains profitable.
In the case of Mighty Corp., it does not pay royalty fees to foreign companies for the brand use. Sourcing of raw materials locally is also one of the key factors that enables the company to sell cheap cigarettes in the Philippines.
Mighty's legal counsel Miguelito Ocampo said:
“While our company cannot comment on how other cigarette companies price their cigarettes, what we can say is that our company can sell one-peso-per stick cigarettes because... Mighty does not pay royalty fees to foreign companies for the use of our brands of cigarettes.”