Cigarette sales of the Thailand Tobacco Monopoly (TTM) have declined significantly as Thai smokers started rolling more of their own cigarettes in the wake of last month’s tax hike, reports The Bangkok Post.
The state-owned tobacco manufacturer expects sales will gradually improve and return to normal in the coming months.
Managing Director Torsak Chotimongkol said the cigarette sales volume fell by 70 percent in the first week after the tobacco tax hike was announced on 21 Aug. But the situation improved the following week, with sales rebounding to half of normal levels and then to 70 percent this week.
The RYO cigarette market has been showing signs of significant growth and now exceeds the TTM’s market share.
Despite the challenges, the TTM forecasts improved full-year results supported mainly by better cost management and higher prices as a result of the excise tax increase.
It booked revenue of THB70 billion ($2.27 billion) for a net profit of THB5 billion last year and expects the bottom line will increase to 5.5 to 6 billion this year.
The TTM is building two new factories, in the Rojana Industrial Estate and Chiang Mai province.
They are intended to boost quality rather than capacity, which the TTM will keep at 3.2 billion cigarettes a year.