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Premium Cigarettes at Discount Price
Premium cigarettes at discount price – this is not something that raises many an eyebrow anymore. One would have not cared to spare a thought about discount cigarettes till the last steep tax slap in USA and Western Europe. Well, here we are and the reality is premium cigarettes are available in reality at discount prices.
Let us think about the way the industry and the smokers have come to settlement with the reality and how they both found a way out. When tax on cigarettes was increased it was the premium brand cigarettes that have taken the beating the most. This was especially so in USA and in particular in four states where the increase in tax was over 200 cents per pack. This increase in tax is not applicable to Native Indian areas which continued to enjoy the original tax regime. Although the intention behind this increase, by the governments, was the larger interest of public healthcare and clearly not additional revenue generation, the smoking populace and demand were ever increasing. The average age of people taking to smoking has come down from 17 years to 16 years at the same time.
Premium cigarettes such as Marlboro, Virginia Slims, Camel, Winston, Davidoff, LM and Dunhill amongst many, which accounted for over 85% of sales, had to follow what other generic brands had done. Eastern Europe was identified as one destination which offered very attractive incentives to manufacturing activities including tobacco industry.
Many Eastern European countries have tax free regimes while others have low taxes for tobacco manufacturing. This is an opportunity for all those that is somebody in the industry. Now, at this juncture, it is quite apparent but interesting to know how the cigarette industry is utilizing the opportunity.
Traditionally, American premium cigarettes’ manufacturers dominated the industry both by volume and value in terms of dollar turnover followed by Europe and Asia. In the changed situation, at present, countless number of cigarette retailers and large scale traders have chipped in by serving the American retail market at discount prices. The price difference is generally so big that it almost times nullifies the shipping and custom duty at the destination country. In plain language, this means that even the premium cigarettes arrive at your door step at a cheaper cost than buying locally. Almost all the premium cigarette manufacturers have begun manufacturing in Eastern Europe and this includes hot brands like Marlboro, Davidoff, Virginia Slims, Camel, Winston, LM, Kent, Dunhill and 555.
Still there are a couple issues to be answered before we can be able to pass on some kind of judgment on how premium brands can sell their products at discount prices. The transition of premium cigarettes from USA to Eastern Europe was not overnight. Plus, simultaneously, Japanese and Russian tobacco manufacturers who were producing and exporting discount cigarettes, albeit generic, from the region. When premium brands were shifting over, a few of them had invested in the existing companies in Eastern Europe so that the product could go off the block quickly.
This was just when online marketing was mature enough and people were open to buying from international retailers too, thanks to secure payment gateways. The fact that cheap labor also contributed to the cause is only an understatement. Could you, the regular smoker in you, have enjoyed your same premium cigarettes if not for this discount price? |