Death Marketing-1

BATB's Royals: targeting low income people, weakening tax measures

BATB has recently introduced a new brand of cigarettes, "Royals' in market. The price of each stick of Royals is Taka 5. The introduction of ‘Royals’ is BATB’s strategy to neutralize the effect of considerable increase in the price of medium-tier cigarettes in the 2019-20 budget. This means that Royals is intended to replace BATB’s only medium-tier brand ‘Star’. The price per stick of Star stands at Taka 6.5 due to budgetary measures. The price of each stick of all low-tier cigarette brands currently in the market is Taka 4. As a result, even the retailers are also suggesting customers to use Royals instead of Star. The BATB Helpline with regards to Star brand is also encouraging its customers to use Royals. If such aggressive marketing tactics of BATB succeeds and the consumers of medium-tier cigarettes get transferred to low-tier cigarettes, then the govt. will lose Taka 21 in revenue in the sale of 10 sticks of cigarettes. It should be noted that, low-tier cigarettes constitute 72 percent of the total cigarette market of Bangladesh. The data collected by the National Board of Revenue (NBR) suggest that in 2009-10, medium-tier cigarettes made 43 percent of total BATB cigarette sale which by 2017-18 became only 17. In the contrary, during this same time period, the sale of BATB low-tier brands increased by 9 percent and became 65 percent. So, the sole purpose of BATB’s introducing new brands is to expand the market of low-tier cigarettes and provide the consumers with opportunity to light up at a lower price. Much like BATB, cigarette companies often weaken the effectiveness of any tax measures of the govt. intended to discourage and decrease the use of cigarettes. To put an end to such anti-public health strategies of tobacco companies, it is a must to formulate and implement an effective taxation policy.