Philip Morris is here to help…

June 30, 2009

Remember that famous phrase, “We’re from the government and we’re here to help”? Well, at a time when many governments are struggling to make ends meet Philip Morris (PM) says that they’re here to help.

In this 74-page slideshow last Friday (there’s lots of pictures, so don’t be too scared), the company’s CFO noted that because it was raising prices on cigarettes in dozens of countries it was actually helping various governments. Here’s how Philip Morris describes it in one of the slides: “Higher cigarette retail prices are boosting government revenues.”

Need proof? Just look at slide #13, which showed the price of a pack of Marlboros in the Ukraine climbing a whopping 78% since January 2008. Slide #12 shows how taxes have also increased dramatically in the Ukraine, rising more than four-fold since Jan. 2008. Despite these sharp price hikes, slide #14 shows that a pack of Marlboros is still cheaper than many other things that consumers might buy in the Ukraine, including a movie ticket, a bottle of Budweiser, a Big Mac, and Colgate toothpaste. Milk, bread, Coke and beer are cheaper than a pack of Marlboros, the slide shows.

We also liked Slide #23, which showed that despite a sluggish economy, Mexican smokers are still willing to plunk down money for Marlboros (and other premium brands) — a whopping 65% opt for premium brand cigarettes there compared with just under 13% in Poland. Another slide shows that Marlboro’s market share in Mexico is just under 50%.

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