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Cigarettes: a dispute between companies that is not pure smoke

2023-01-22T23:13:42.642Z


The fight is for an internal tax that is decisive when it comes to the final price of the package. Who avoided it?


At first glance it resembles those frequent smoke games in smokers.

But for a long time the cigarette industry has been in a real turmoil.

Historically, it was

dominated by the multinationals

Philip Morris, with its heart in the United States, and by British American Tobacco, with its headquarters in London.

Philip Morris is number one in the world and still holds the scepter in the country with

50% of the market and the best-selling brand,

Philip Morris.

This is not the case of British American Tobacco, which fell several boxes.

In a business whose selling price is determined by the level of taxes,

two national companies got in their way.

The issue in question is the

minimum tax,

established by Néstor Kirchner in 2004 with the triple purpose of collecting, discouraging consumption and combating smuggling.

Cristina Kirchner transformed it into law and Mauricio Macri established years later that it was fixed and readjusted four times a year.

What is said, state policy.

The difference in prices between the companies that pay it and those that obtained precautionary measures is

abysmal

and is due to these judicial advantages.

That minimum excise tax is $217 per pack of 20 cigarettes

, which makes the Philip Morris Marlboro worth $560, for example, or the

Philip Morris costs $440.

In the case of Sarandí, one of the companies with national capital, obtained the precautionary measure in 2016 and was later revoked at the Supreme Court level.

The novelty this time is the irruption of the Rosario Bronway that comes to the sector from other areas and requested

legal protection that was denied, added to a million-dollar claim from the AFIP.

By not resigning himself, he threatened to

fire his almost 200 employees

until at the end of last week the AFIP demanded that he pay $90 million and thus be able to access the essential stamps to sell the cigarette packs.

Bronway, whose visible face is Dario Ipolito, is the only tobacco company in Santa Fe. It offers the Pier and Dolchester brands.

To all this, tobacco producers have been crying out for a while:

they fear that the Special Tobacco Fund,

which represents 8% of the final price of cigarettes, will be underfunded.

They want everyone to pay taxes.

In turn, Sarandí, with a track record in the field and under the leadership of Pablo Otero, has just

strengthened the agreement

it has with the British Imperial Brand.

She is the owner of the French Gauloises and the North American brands West and Nevada.

For the experts, the price of the cigarette is cheap in Argentina, even if it is measured with other products of the family basket.

For this reason, they consider that it is key to comply with the payment of taxes in full

to discourage consumption in a country where 45,000 people die per year due to tobacco and these conditions represent

37% of health spending.

Argentina

is, after Cuba, the second largest consumer in the region with

744 cigarettes per inhabitant per year.

We are the sixth tobacco-producing country in the world and the second in the region.

According to the World Health Organization, the tax burden on the final price of cigarettes in Argentina

reaches 80.3% while in Chile it climbs to 89.1%

.

Chile is the country that punishes consumption the most.

Denmark, in the last step of the table, applies taxes for 74.85%.

Source: clarin

All business articles on 2023-01-22

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