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Black Market Flourishes As Supplies Dry Up


Gold Flake and Wills Filter, two of ITCs highest selling brands, are in short supply in Calcutta. The retailers complain that there is practically no supply from the company.

As a result, retailers have to get the brands from blackmarketeers at a higher price and have to sell at higher prices to maintain a minimum profit.

Some retailers, however, claimed that the shortages existed even before the recent cyclone.

Earlier, we used to get as many packets as we needed, now the company only gives us 10 to 20 packets, and the rest we have to get from the blackers, said a retailer.

The small Gold Flake pack which was previously priced at Rs 9.60 per pack by the whole-sellers are bought at Rs 10 by the retailers from the black market. As a result, the packet, earlier sold at Rs 10, is now being sold at Rs 10.50.

The price of a packet of Gold Flake Kings is Rs 34. The retailers get this from the black market at Rs 33.50 which means they get a margin of 50 paise in the place of Rs 1.40 they used to get.

The retailers profit margin for Wills Filter has also been affected by the current lack of supply.

The market price for a packet of Wills Filter is Rs 13. The retailers used to get a profit of about 60 paisa per packet when they bought from the whole-sellers. Now as they have to depend on the black market, they get only 10 paise per packet.

Kamal Ramnath, chief executive of ITC tobacco division, when contacted blamed the weather for the situation. The recent cyclones in the country have slowed down transportation. The supplies will come in another day or two and then all the prices will back to normal, he said. Retailers do not agree. Supplies, they say, were getting scarce from Durga Puja, and that the cyclone hit Andhra only after October 21.

With Wills and Gold Flake in short supply, other brands have a great opportunity to make their presence felt in the market , otherwise dominated by these brands.

First Published: Fri, November 01 1996. 00:00 IST