Thank you for smoking morocco edition


Smoking does kill and it causes very serious health problems. Yet smoking is prevalent in Africa and the middle east.  It is a black hole, it goes from the lives of the poor to foreign companies. Even if tobacco was grown locally, it is still bad because that land could be used to grow food.

The cigarette produces every year some 16 billion dirhams in sales. And despite the arrival of two new competitors, very juicy market is still dominated by the former RTM. Focus on a war that is played with unequal arms.

The cigarette, it kills, but it is big. In 2011, Moroccans have spent over $ 16 billion dirhams for a smoke. This manna, which was always the monopoly of RTM (now Altadis after its privatization and Imperial Tobacco Morocco), is being courted for a few months with new players. Since 2011, when market liberalization, two other operators have entered the arena: the first is called Japan Tobacco International. It is number three global industry and is known for its brands Camel and Winston. The second is none other than British American Tobacco, and sector number 2 producer of premium brands Kent, Dunhill and Lucky Strike. As soon as the barrier lifted the monopoly, both majors tobacco, which were previously forced to go through the former RTM to sell their products to the kingdom, were quick to break their distribution contract with the incumbent. This task, they entrusted to local distributors who have a storefront. The Japanese chose North Africa Tobacco Company (NATC), owned by Spanish Cobega already present in Morocco via NABC, exclusive distributor of Coca-Cola. The British, however, has focused on Dislog, distributor of Procter & Gamble, whose shareholder is none other than the former Minister of Youth and Sports, Moncef Belkhayat.

 

Sakka operation

From the outset, the two majors bombard a blow to the incumbent, who lost overnight no less than 7% market share.”This is especially the loss of the card Winston penalized us, other brands do not represent much in cigarette sales in Morocco,” then explain managers Morocco Imperial Tobacco as to minimize damage offensive by the competition in the segment of premium cigarettes. Attack of the newcomers do not stop there. To dethrone the British Imperial Tobacco, they launch a large-scale charm with sakkate. Forced to work with Altadis, tobacconists previously saw a 5% commission on sales. Newcomers climb the auction and are now offering 6% with quarterly bonuses bonus, a sort of incentives that vary depending on turnover. Moncef box Belkhayat Dislog, proved even more generous, offering a premium of 1000 DH as recharge card at any tobacconist who agrees to set up displays dedicated to British American Tobacco products. The offer appeals to tobacconists, who even agree to receive occasional sales consultants of the company, rather pretty girls who try to direct purchases smokers, praising the qualities of Dunhill and Camel, and offering gadgets sympathetic to “infidels.”

 

Marlboro, my love

On paper, these marketing efforts seem to shake the established order on the market. But the reality is different. Nearly two months after the liberalization, new players have a hard drilling and Imperial Tobacco remains the undisputed market leader, with a market share still exceeds 82%. For in this war, the former on account Altadis ally, Philip Morris, the world leader and owner of the card Marlboro, preferred brand in the segment of Moroccans feature. “There are people who are willing to buy Camel, Dunhill or Winston. But they did not take long before returning to their first love, Marlboro, “notes the newsagent downtown Casablanca. It is well known: in the tobacco sector, it is difficult, very difficult to change habits, especially when the pub is prohibited and that prices are regulated. Morocco Imperial Tobacco, which manufactures under license the Philip Morris brands in its plant in Ain Harrouda, is unbeatable in this field. There remains another market segment, the largest, that of the low-cost cigarette. A segment where the incumbent use of a weapon of mass destruction, named Marquise, under the watchful eye of a powerful ally: the state.

 

The true-false liberalization

Privatized in 2003, the RTM prepared since that time, the market opening, scheduled for late 2007 first before being postponed to early 2011. And it seems that buyers have successfully negotiated their deal. In a section of the Act, the State has conferred a benefit on the new shareholder or the board. It states in particular that any new tobacco product can not be sold at a price less than “the arithmetic average selling prices to the public in force …” The average is now 27.13 DH. In other words, new entrants to the former RTM can now sell their cigarettes at a lower price. However, the bulk of the market is in this segment, with 82% of the sector’s business is earned by low-cost brands, sold at 22 DH maximum. The State, therefore, through this section of the law, locked 82% of the business on behalf of the incumbent, which continues to wreak havoc with its famous Marquise brand. The latter alone accounts for some 66% of market share. The rest of the segment revenue is earned by the Gauloises Fortuna or even, sold respectively at 22 and 20 DH.”This is outrageous. The State shall protect Imperial Tobacco with this provision of law, depriving us of exercise on the segment of low-cost “, warns one of the operators in the sector. Seized on the issue, the Council of Competition Abdelali Benamour confirmed in a recent report that the anti-competitive practice is, in his words, to “extend the monopoly of Imperial Tobacco in the Moroccan market tobacco.” In the lounges of the economic capital, whispering that the former Altadis would have had a secret agreement with the State, the obligation to repurchase the governed. In exchange, the state would protect the business … locking the business. Even Nick Naylor, lobbyeur gifted hero of the movie Thank you for smoking, could not ask for more!

 

 

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