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Philip Morris Going To Expand Activity In Armenian Cigarette Market

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  • Philip Morris Going To Expand Activity In Armenian Cigarette Market

    PHILIP MORRIS GOING TO EXPAND ACTIVITY IN ARMENIAN CIGARETTE MARKET
    Hripsime Hayrapetyan

    PanARMENIAN.Net
    January 31, 2011

    In 2010, Armenian government took some measures to regulate the
    cigarette market and determine approaches to local manufacturers and
    importers. Regional manager of Armenian representation of Philip Morris
    Management Services B. V., the major cigarette importer in Armenia,
    Mr. Sargis Tsaghikyan commented on the company's future plans in an
    interview with PanARMENIAN.Net.

    What performance indicators did the Company have by the end of 2010?

    Does it manage to get the pre-crisis level of sales?

    According Philip Morris Management Services B. V. Representative
    Office (PMA) is an affiliate of Philip Morris International Inc
    (PMI)3. With having strong and balanced brand portfolio in Armenia,
    presented in most price segments and consumer preference categories,
    we have responded to adult consumer needs. Our distribution partners
    provided high level of service to our customers. We are pleased with
    our business performance and will continue to work to grow our market
    share in Armenia.

    How do you estimate the tobacco market in Armenia? What is the share
    of Philip Morris International in the Armenian market?

    Armenia is a highly competitive and a very dynamic market. According
    to AC Nielsen September â~@~P October 2010 retail audit, PMI brands'
    share of market in Yerevan is 19.5%, the largest among international
    tobacco manufacturers.

    How many brands of PMI cigarettes are imported to Armenia? Are there
    any plans to increase the given stock/volume? Which products of the
    Company enjoy popularity in Armenia?

    Currently PMI portfolio in Armenian market consists of 9 brand
    families: Marlboro, Parliament, Virginia Slims, Muratti Ambassador,
    Assos Slims, Chesterfield, L&M, Bond Street and Red&White. L&M brand
    family is being the most sold among PMI brand portfolio.

    Is the Armenian regulatory environment favorable for the tobacco
    market? How do the recent amendments to the RA Law On Excise Tax affect
    stiffening competition among the local and international manufacturers?

    Armenia has a well-established legislative framework to regulate
    tobacco products and we are keen to work with state authorities
    and public health officials to agree on rules and regulations for
    the industry. It is important that regulation is comprehensive,
    evidenceâ~@~Pbased, is applied to all tobacco products and all tobacco
    manufacturers and that adequate enforcement is in place. Such tobacco
    regulation can help achieve government's public health objectives.

    Philip Morris Management Services B.V. Representative office in Armenia
    welcomes recent tax changes, provided that they are implemented in due
    course without any further delays, and welcomes Armenian government
    initiatives to amend Tobacco Products Taxation to bring it in line
    with WTO and FTA requirements.

    Does the Company consider the possibility of establishing a raw
    material base of its own in Armenia and manufacturing tobacco in the
    Armenian market?

    Currently there is no such intention. We do not discuss our future
    plans to that end.

    Nowadays more and more people are giving up smoking all over the world,
    and is this fact has been noticed by Philip Morris proceeding from its
    production volumes? In this regard what campaigns and programs have
    been conducted and implemented by the Company in Armenia, including
    smoking preventive measures?

    PMI is the leading international tobacco company, with products sold
    in approximately 160 countries. In 2009, we held an estimated 15.4
    percent share of the international cigarette market outside of the
    U.S., or 26.0% excluding the People's Republic of China and the U.S.

    There is no data on 2010 yet. For more information, see www.pmintl.com.

    On October 21, 2010 the President of Armenia signed amendments to the
    Law on Excise Tax and the Law on Presumptive Tax for Tobacco Products
    which provide for annual gradual reduction of tax rate differences
    for imported and locally produced tobacco products as of 01.01.2011
    and for full unbundling of presumptive tax for tobacco products as
    of 01.01.2014 thus establishing equal treatment for both locally
    produced and imported cigarettes.

    Cigarette smoking is addictive and causes serious diseases in smokers;
    we recognize that there is no such thing as a safe cigarette and
    support strong and effective tobacco regulation. We agree with public
    health authorities that cessation should be an integral focus of a
    comprehensive tobacco policy. We do not target non-smokers or underage,
    and our marketing activities are directed to adult smokers in order
    to encourage them to choose our brands instead of competitor's brands.

    We believe that tobacco manufacturers can and should take action
    to prevent youth smoking. Tobacco company actions can range from
    supporting effective regulation to implementing their own youth
    smoking prevention programs. Since 1999 Philip Morris Management
    Services B.V. Representative office in Armenia has been implementing
    youth smoking prevention programs informing trade about legislative
    prohibition to sell cigarettes to minors and liability in case of
    law infringement. In 2010 the program covered 2,500 trade outlets.

    Tell about the plans the Company has for 2011...

    We are confident that as a Company we have a strong potential and
    we'll continue to work to grow our market share in Armenia through
    further development in our brand portfolio, distribution system,
    investments in brand building and development of our employees.




    From: A. Papazian
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