• Small tobacco growers worried over leaf imports

    3

    Local tobacco growers on Wednesday asked the gov-ernment to make public the result of its probe over the alleged under-declaration by Mighty Corp. of its imported tobacco leaf.

    In a statement, the Ilocos Sur-based Banayoyo Refore-station and Tobacco Growers Credit Cooperative (BRTGCC) called on the Bureau of Custom’s Post Entry Audit Group to disclose the result of its investigation over the questionable trade practices of Mighty.

    “As far as we know, the deadline has lapsed,” said BRTGCC President Franciso Gamboa.

    To recall, the BOC in its October 21 letter to Mighty, asked the Bulacan-based ci-garette manufacturer to res-pond to the charges within 15 days.

    Gambao said that local tobacco growers were alarmed over the continued entry of cheap tobacco leaf into the country, which is way below the cheapest tobacco they sell.

    He said that it would ultimately drive the local tobacco growing industry out of business if the practice of Wongchuking-led firm—which imports tobacco leaf at $0.68 (P29.24) a kilo in 2011 and 2012—is allowed to persist.

    “We cannot compete against this very low price of Mighty imports,” Gamboa said.

    “Maybe that is why we don’t see the Wongchuking family here in the North. They don’t buy tobacco from us. Maybe in some other places but I’m sure the volume is very low,” he added.

    According to the farmers’ group, the government-mandated floor price in 2011 was P58.69 a kilo for flue-cured tobacco and P38.42 for burley. For 2012, the floor price was P75 for flue-cured and P61 for Burley.

    Isabel Jimeno of the Samahan ng Magtatabako ng Kanlurang Mindoro said that local tobacco industry “will die without a fight” if the government allowed the company to continue bring into the country cheap tobacco leaf.

    “What is amazing is how they can import at a single price of $0.68 per kilo, all the various types of tobacco,” she added.

    Earlier, Department of Finance Secretary Cesar Purisima ordered the BOC and the Bureau of Internal Revenue to investigate the alleged under-declaration of Mighty’s imports.

    BOC records show that the cheapest imported tobacco at that time was $3.39 a kilo, way above the $0.68 a kilo im-portation of Mighty.

    Besides tobacco leaf, Mighty reportedly imported acetate tow, the raw material used for cigarette filter at $0.30 a kilo. The cheapest tow imported in 2011 and 2012 was at $5.26 a kilo.

    The House Ways and Means Committee upon a resolution filed by Rep. Pablo Javier will conduct its own inquiry into the alleged questionable trade practices of Mighty.

    According to news reports, Mighty has grown from 7-percent market share in December 2012 to 20 percent in June 2013, and is now the dominant manufacturer in the low-price segment.

    Share.
    loading...
    Loading...

    Please follow our commenting guidelines.

    3 Comments

    1. First the farmers should unit and ask their members of Congress to pass a law that will compel Mighty Corp. and others to buy from them. Also they must push both Congress and the executive to investigate the continued dumping of raw materials in the country.

    2. Obviously, Mighty is playing the under-declaration game in cahoots with BOC personnel. Mighty is not only depriving the government of proper import tax but also depriving our own farmers of earnings from their tobacco leaves.

    3. There must be a law that will push tobacco companies to buy from local markets. What some of these companies have been doing is import raw materials at very cheap prices then cheat government by not paying the correct excise taxes.