ITC to launch Lucky Strike as competition fires up

Rattled by competition in the foreign premium cigarettes segment, market leader ITC Ltd is launching its major shareholder British American Tobacco’s (BAT) popular cigarette brand Lucky Strike in India.

BAT owned nearly 33% in ITC as of March-end.

Sources close to the development said ITC will roll out Lucky Strike in New Delhi, Mumbai and Pune by the end of this month.
Its major stockists in these cities have been apprised of the launch, but will receive despatches only a few days prior to actual launch.

The cigarette will be priced at Rs110 for a pack of 20 sticks, thereby positioning it at a premium to Philips Morris’ premium cigarette Marlboro—now being sold under licence by Godfrey Phillips—but at a discount to US-based Imperial Tobacco Group’s super-premium cigarette Davidoff.

Imperial Tobacco has priced Davidoff cigarettes in India at around Rs 120-125 per pack of 20 sticks, according to retailers.

Although Davidoff was already being sold through the grey market in India, Imperial Tobacco in May tied up with Barakat Food & Tobacco to “officially” import and distribute the cigarettes in India.

Barakat earlier distributed Marlboro in India on behalf of Philip Morris, before the latter signed a licensing agreement with Godfrey Phillips.

Last month, Godfrey Phillips launched an upgraded variant — Marlboro Gold Advanced—but retained the price at Rs 98 for 20 sticks, in a bid to improve its market share.

Godfrey Phillips has a market share of 8% in the branded cigarettes segment, and Marlboro cigarette has made significant inroads, said retailers.

ITC is the leader with 80% share of the segment.

But a bulk of this is driven by its mid-market and upper-market brands Classic and Gold Flake.

In the premium segment, its current offerings are Benson & Hedges and 555 State Express, which are also BAT brands sold under licence by ITC.
NW18