Cigarette makers adapting to anti-tobacco law

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SAN JOSE, COSTA RICA – October 15th, 2012 – The “Tabacalera Costarricense S.A., or TACSA, which is affiliated with Phillip Morris International, says it is preparing to eliminate cigarette packs with less than 20 cigarettes from the Costa Rican market, and withdraw all of its publicity and advertising from the country’s media starting next year.

 

Meanwhile, British American Tobacco Caribbean & Central America (BATCCA), the other large competitor in the Costa Rican market, implemented as a priority measure what is described as an informational campaign for its business customers in regards to the new anti-tobacco law, which came into effect on March 26th.

 

Though both companies say it is too early to speculate what effect the law will have on tobacco sales, they do expect a period of adjustment in the market.

 

“Both (businesses) and consumers have been confused and sometimes even scared, as they have been exposed to incorrect interpretations of the law,” said Gerardo Lizano, manager of BATCCA Corporate Affairs.

 

The tobacco business in Costa Rica generates sales of approximately $277 million per year.  Costa Ricans consume 1,127 cigarettes per capita.

 

BATCA sells five brands of cigarettes: Dunhill, Kool, Pall Mall, Delta and Viceroy, whereas TACSA sells Derby, Marlboro, Next and L&M.

 

Lizano expects next year’s sales to be similar to this year. However, this will depend on a problem considered worse than the new law: cigarette trafficking. According to BATCCA, the illegal business has already stolen 10% of the market.

 

Both companies also express interest in developing new types of nicotine products, such as products which atomize nicotine instead of burning tobacco – what has come to be known as the electronic cigarette.

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