Bulacan execs puzzled by woes faced by tobacco firm

CITY OF MALOLOS—Bulacan province considers the tobacco firm Mighty Corp. based here as a boon to its economy, and its officials are surprised other tobacco manufacturers have been raring to see the company fall.

Originally La Campana Fabrica de Tabacos Inc., Mighty is giving jobs directly and indirectly to at least 2,000 people, according to Oscar Barrientos, the company vice president.

Roseth Eleogo, 29, a plant worker from Barangay Maysantol in Bulakan town, said she takes home a monthly salary of almost P12,000 and has been happy about Mighty’s operations in the province.

Mighty’s manufacturing plant in Barangay Tikay here earned gross receipts this year from which City Hall was paid P7,576,425.28 in business taxes, said Mayor Christian Natividad.

But industry leaders have urged the Bureau of Internal Revenue to investigate the firm because of allegations that it was undercutting the competition, Barrientos said on Thursday.

He said Mighty’s sales and share in the market represented more than 20 percent, a sharp rise from its 3-percent take in previous years.

The firm has targeted the low-end consumers and has been selling lower-priced cigarettes, he said, adding that it was a business strategy that appeared to have threatened the industry’s top players.

Gov. Wilhelmino Sy-Alvarado said Mighty, given its history in  Bulacan, had been an “economic asset the province would regret losing.”

He said the firm was not doing well for a time until the last few years when it started to profit once more in the cigarette market.

“Before this was a losing business, so now that it’s earning why would they want it stopped?” he said.

Barrientos said unnamed tobacco companies also asked for a congressional investigation, which, he added, Mighty welcomed “to  clear the air.”

But the investigation should cover all players in the tobacco industry, he said.

The controversy also appeared to be a fallout from the passage and enforcement of Republic Act No. 10351 (the sin tax law of 2012), which will change the way cigarettes are priced in the market.

“After five years, there will be a unitary tax [on all tobacco products], so all the prices will be even. It is just a period of adjustment today,” Barrientos said.

He said the company started making profits in January when the sin tax law took effect. He said consumers started switching to their brands, despite the fact that the law compelled them to raise prices from P18 to P25 a pack. Carmela Reyes-Estrope, Inquirer Central Luzon