Cigarette firms to hike local tobacco purchases

by Mary Grace Padin (The Philippine Star), 21 Oct 2020

MANILA, Philippines — Cigarette manufacturer Japan Tobacco International (Philippines) Inc. is planning to increase its purchase of locally produced tobacco to support farmers reeling from the impact of the coronavirus pandemic.

At the same time, Philip Morris Fortune Tobacco Corp. Inc. (PMFTC) has committed to purchase a substantial volume of its tobacco requirements from local suppliers to aid affected farmers and their families.

In a statement, the Department of Finance (DOF) said JTI is targeting to purchase 4.6 million kilograms of tobacco leaf in 2021, one million kilograms higher than the volume it bought from farmers this year.

JTI general manager John Freda, in a letter to Finance Secretary Carlos Dominguez and Agriculture Secretary William Dar, said the company’s local team is coordinating with its global leaf supply chain to study the possibility of further increasing the volume “next year and in the coming years.”

At 4.6 million kilograms, JTI’s local procurement program would be equivalent to a quarter of the company’s total leaf requirement next year.

This volume is also well beyond the requirement provided under Republic Act (RA) No. 10351, which states that manufacturers or sellers of tobacco products should procure at least 15 percent of their leaf raw material from locally grown sources.

According to the DOF, JTI revealed its procurement plan in response to the request of Dominguez and Dar for the cigarette manufacturer to help support local farmers and raise revenues for tobacco-producing provinces affected by the COVID pandemic.

In their letter to JTI, Dominguez and Dar said strict quarantine measures imposed to curb the spread of COVID-19 had constrained the marketing flow of food and agricultural goods.

They said tobacco is among the most affected crops as it is a non-food commodity.

“Your kind assistance will translate into realized income to farmers, which assures food on their table and revenues for local government units (LGUs),” they said.

For its part, Philip Morris Fortune Tobacco Corp. said it “remains committed to spur economic activities in tobacco-farming communities to help sustain the economic development of the country.”

“We share your concern on the plight of our local tobacco farmers, and we agree that immediate assistance must be extended to the affected farmers and their families,” PMFTC president Dennis Gorkun said in his response to both Dominguez and Dar.

Last year, PMFTC bought 43 percent of its leaf purchases from local farmers to cater both domestic and 15 export countries.