Dec 2005 Financial News

‘Operational costs’ drive up cigarette prices

Dec 16, 2005

Operating costs and additional security are the reasons why the West Indian Tobacco Company Ltd (Witco) has increased the prices of three of its four locally distributed brands by seven-and-a-half per cent.

Managing director Anthony Phillip yesterday said the brands that now cost more are du Maurier, Mt D’Or and Broadway.

Those increases are: Du Maurier: 20s full flavour, $11; 10s full flavour, $5.75; 20s full menthol, $11; 20s lights, $11, and 10s lights, $5.75.

Mt D’Or: 20s, $9.25, and 10s, $4.75. And Broadway: 20s, $9, and 10s, $4.50.

The price of Benson & Hedges cigarettes, though, remained the same at: 20s special filter, $12; 1-s special filter, $6; 20s menthol, $12 and 20s lights, $12.

Witco stated that these VAT-inclusive price increases take effect from December 12.

Phillip said the increases were to meet additional expenses—the installation of new equipment and security costs, both internal and distribution.

He said Witco’s tremendous capital investment in 2005 impacted on the company’s depreciation, which “is significant in terms of charges going forward.” Witco’s depreciation was greater than its security costs, he said.

Phillip said the increases are also in line with inflation, which now stands at 6.5 per cent.

He said only one month ago, Witco settled a three-year collective agreement with the trade union, and that the new agreement was retroactive to January 2005.

“I’m not blaming that on the increase, but it is part of our operating costs,” Phillip said.

The Trinidad Guardian
Friday, 16th December, 2005
http://www.guardian.co.tt/business3.html