The Chairman of the West Indies Tobacco Company (WITCO) has confirmed that it has increased the prices of its products.
In an interview with Guardian Media Ltd (GML), Phillip said: “Normally price increases are approved by the board of directors, and in this case we had a price increase.”
Phillip also confirmed that this “is as a direct result of the excise increase on cigarettes.” In the Finance Minister Colm Imbert’s recent Budget presentation, he announced that the government would raise excise duties on locally manufactured tobacco products by 20 per cent.
However, Phillip noted that WITCO has no control on how much retailers would charge for the cigarettes. He said that is why it recently released a “suggested retail price” advertisement in the media.
This because WITCO cannot make such suggestions mandatory, said Phillip. According Phillip, retailers have been raising their prices in response to excise increases for a long time.
He recalled a particular price increase in the 1980s, noting that up until then WITCO had not produced the suggested price list. As a result, Phillip said “there was a free for all in the market and people started to do all kinds of things.”
As a result, Phillip said that the company instituted a policy of printing the suggested price list on all levels to safeguard the customers and retailers.
According to Phillip, the company has established a recommended price at which retailers should by from the distributors. The WITCO Chairman said there is also a price from which the distributors buy from the company as a result of the excise increase.
As a responsible corporate citizen, Phillip noted that WITCO’s publishing of the suggested price increase serves the best interest of its customers. When asked if the price hike resulting from the excise increase would be passed on to the customer, Phillips said, “yes it will be.”
When asked if the price increase impact the company’s bottom line Phillip said, by and large, the price of good influences the choice of the customer.
He explained, “So the question about the bottom-line, like any well run company, we are going to manage that to make sure at the end of the day that there’s equitable distribution.”
Phillip said that the company has no control over the various taxes imposed by the government. Nonetheless, the Chairman maintained that WITCO has a local interest because it is part of the environment, noting that the company produces and sells its product in the country.
He added: “And we have a special relationship with the government because we are the collector of excise, just like the alcohol industry, which drives some of the income that the government collects.”