| Premium cigarettes at discount price – this is | | | | Traditionally, American premium cigarettes’ |
| not something that raises many an eyebrow | | | | manufacturers dominated the industry both by |
| anymore. One would have not cared to spare a | | | | volume and value in terms of dollar turnover |
| thought about discount cigarettes till the last steep | | | | followed by Europe and Asia. In the changed |
| tax slap in USA and Western Europe. Well, here | | | | situation, at present, countless number of |
| we are and the reality is premium cigarettes are | | | | cigarette retailers and large scale traders have |
| available in reality at discount prices. | | | | chipped in by serving the American retail market |
| Let us think about the way the industry and the | | | | at discount prices. The price difference is generally |
| smokers have come to settlement with the | | | | so big that it almost times nullifies the shipping and |
| reality and how they both found a way out. When | | | | custom duty at the destination country. In plain |
| tax on cigarettes was increased it was the | | | | language, this means that even the premium |
| premium brand cigarettes that have taken the | | | | cigarettes at discount price arrive at your door |
| beating the most. This was especially so in USA | | | | step at a cheaper cost than buying locally. Almost |
| and in particular in four states where the increase | | | | all the premium cigarette manufacturers have |
| in tax was over 200 cents per pack. This increase | | | | begun manufacturing in Eastern Europe and this |
| in tax is not applicable to Native Indian areas | | | | includes hot brands like Marlboro, Davidoff, Virginia |
| which continued to enjoy the original tax regime. | | | | Slims, Camel, Winston, LM, Kent, Dunhill and 555. |
| Although the intention behind this increase, by the | | | | Still there are a couple issues to be answered |
| governments, was the larger interest of public | | | | before we can be able to pass on some kind of |
| healthcare and clearly not additional revenue | | | | judgment on how premium brands can sell their |
| generation, the smoking populace and demand | | | | products at discount prices. The transition of |
| were ever increasing. The average age of people | | | | premium cigarettes from USA to Eastern Europe |
| taking to smoking has come down from 17 years | | | | was not overnight. Plus, simultaneously, Japanese |
| to 16 years at the same time. | | | | and Russian tobacco manufacturers who were |
| Premium cigs such as Marlboro cigarettes, Virginia | | | | producing and exporting cheap discount cigarettes, |
| Slims, Camel, Winston, Davidoff, LM and Dunhill | | | | albeit generic, from the region. When premium |
| amongst many, which accounted for over 85% | | | | brands were shifting over, a few of them had |
| of sales, had to follow what other generic brands | | | | invested in the existing companies in Eastern |
| had done. Eastern Europe was identified as one | | | | Europe so that the product could go off the block |
| destination which offered very attractive | | | | quickly. |
| incentives to manufacturing activities including | | | | This was just when online marketing was mature |
| tobacco industry. | | | | enough and people were open to buying from |
| Many Eastern European countries have tax free | | | | international retailers too, thanks to secure |
| regimes while others have low taxes for tobacco | | | | payment gateways. The fact that cheap labor |
| manufacturing. This is an opportunity for all those | | | | also contributed to the cause is only an |
| that is somebody in the industry. Now, at this | | | | understatement. Could you, the regular smoker in |
| juncture, it is quite apparent but interesting to | | | | you, have enjoyed your same premium |
| know how the cigarette industry is utilizing the | | | | cigarettes if not for this discount price? |
| opportunity. | | | | |