Cigarette Firm Explains Biz Strategy

"We keep our costs low, while the competition has very high costs.” As Mighty Corporation Executive VP Oscar Barrientos explained why they're able to offer cigarettes for as low a P1 per stick.

Cigarette Firm Explains Biz Strategy

“We are satisfied with low profits while they (other brands) need very high profit,” Barrientos said.

He also added that having no foreign equity and no foreign brands, Mighty Corporation do not remit any royalty to any foreign headquarters and do not maintain any high-salaried consultants.

Mighty Corporation is a small company as it has been since the 1940s. “We produce La Campanilla, Magkaibigan, Campana Ringing Bell and other local brands which are totally and truly Filipino.” The retired judge explains.

"Not a stranger in the low-priced cigarettes business, Mighty Corporation didn't find it hard to solidify its base, enhance its core competencies and work out on its forecasts the migration of a big chunk of smokers who were faced with three choices: quit smoking, smoke less frequently or look for low-priced alternatives," the Mighty Corporation executive said.

On charges that Mighty Corporation may have committed fraud, Barrientos said fraud is a serious offense and as such, it should be proven by complete evidence, adduced in an impartial investigation, conducted by a competent authority, with due regard to the due process requirement.

"Imputing fraud against Mighty Corporation is not only unfair but highly libelous and damaging," he added, who is also a retired trial court judge.

Barrientos said that the competitor's claims are baseless, speculative and malicious, on the accusations that Mighty Corporation might have been selling cigarettes at a loss by as much as P4.47/pack or about 30 percent lower than the estimated break even price, as studied by AC Nielsen.

“We’re not selling at a loss; we’re gaining. Why should we continue our business at a loss? Assuming we’re losing, why should the competition be worried? Actually, we’re making reasonable profit. Our concept of gain is not only measured in peso signs; having been patronized by our loyal customers in the low-priced market, we feel duty-bound to keep our price low owing to our company’s nationalistic anchor,” Barrientos pointed out.

"Besides MC’s margin of profit is certainly different from that of the competition. This is so, because being a local brand, it does not pay royalties abroad, it is not required branch profit remittance, it had no foreign consultants and it is purely Filipino." He ended.