ITC Hikes 'Navy Cut' Price
Source from: The Business Line 12/26/2016
ITC Ltd, the country's largest cigarette maker, has initiated an over 14 per cent price hike in its 'Navy Cut' brand of cigarettes. A similar hike is expected for the 'Gold Flake' (regular) brand too.
According to trade sources, for 'Navy Cut', the new packets that are coming in now have a printed price of Rs. 89 for 10 sticks of 74 mm. The previous price was Rs. 78.
These sources further add that a hike ¨C in the range of 14 per cent ¨C is expected for Gold Flake (of 69 mm size) post Christmas. Currently, a packet of 10 sticks of Gold Flake is priced at Rs. 78.
The reason for an increase in prices is not yet known.
A company spokesperson, confirmed to BusinessLine that prices of "select brands have been revised." He did not elaborate the names of the other brands that might see a hike.
According to an industry analyst, who did not wish to be named, the price hikes are unlikely to have an immediate impact on volumes.
"There is no reason as to why price hikes have been initiated at present especially when there is no such trend in the market," the analyst said.
Interestingly, the company had gone for a 12-13 per cent price hike in two of its flagship brands, 'Classic' and 'Gold Flake King Size' earlier this year. Following the hike, the prices of these brands shot up to Rs. 123 from Rs. 109, for a packet of 10 sticks. The hike, then, was however, restricted to these two brands only.
Some of the brands that Kolkata-based ITC own include Insignia, India Kings, Lucky Strike, Classic, Gold Flake, Navy Cut, Players, Scissors, Capstan, Berkeley, Bristol, Flake, Silk Cut, Duke and Royal.
Till the first half (till September 30, 2016) of this fiscal, cigarette sales accounted for 62 per cent of its total revenue or Rs. 16759 crore out of Rs. 6,648 crore. In case of profit before tax (PBT), contribution of cigarettes was 83 per cent or Rs. 6221 crore out of Rs. 7502 crore. Enditem