Tobacco manufacturer agrees to implement MPI in early July
New CSNA president Peter Gaughan describes outcome as “a resounding victory for the independent retailers"
18 June 2020 | 0
“A resounding victory for the independent retailers,” was how the newly appointed CSNA president Peter Gaughan described the decision communicated to the trade by way of a letter from British American Tobacco (BAT) MD Simon Carroll to reverse PJ Carroll’s previously stated position in favour of an MPI (manufacturers’ price increase) for all of its tobacco portfolio from 6 July.
In previous years, BAT has implemented MPIs in May, which is seven months after the October Budget increase of 50 cent or €5 per outer additional cost.
The CSNA said of these increases, that they “reduce the low margins earned on tobacco and put added strains on our profitability; the idea that any supplier would ignore their responsibility to their customers was particularly irritating and retailers quite correctly made BAT know that they expected margin restoration by way of an action by BAT.”
The association added: “This decision will somewhat soften the annoyance that store owners will feel when they learn that BAT will not be in a position to process credits for unsold individual packs (20s) of menthol products until a new machine arrives in Ireland in September. Retailers with full outers will be credited immediately.
“As BAT had a significant part of their portfolio in the menthol/mentholated range, it’s quite likely that the value of the delayed credits will be relatively large.”
The association is currently in contact with both BAT and Revenue on this matter, noting that it appears a solution to the same difficulties in the UK had led to a more equitable and speedy resolution by the HMRC.
ShelfLife contacted BAT in relation to this matter, but the group declined to comment on this occasion.