Itc May Bring In Its Other Foreign Brands Later

ITC Ltd, which has just launched international cigarette brand Benson & Hedges in Mumbai following a historic licensing pact with BAT, may explore the possibility of bringing in its own international brands into India at a later stage. The ITC-produced B&H has been adjudged the finest quality B&H produced anywhere in the world.

ITC, which has chalked out an elaborate strategy for the international brands launch, will follow up the B&H launch with that of the other major BAT brand, State Express 555. State Express 555 will be launched by us shortly, Kurush Grant, executive vice president (marketing), ITC, said yesterday.

 

Interestingly, ITC itself owns 1300 international brands, better known among which are Lucky Strike, Players, Three Castles and the like. Grant said though no concrete plan was drawn up by ITC relating to the launch of any of these in India, the company reviewed its brand portfolio regularly and could launch any of them if it felt a need in the market.

However, he clearly ruled out launching any other non-ITC-owned international brand following the launch of B&H and State Express 555. B&H is priced at Rs 50 for a pack of twenties, lower than the price of ITCs premium top-end brand, India Kings, which sets the benchmark for pricing of premium brands in India and is the highest priced cigarette in the country.

In six months time, we hope to take B&H in every market of a reasonable size within India, he said.

In another boost for ITC, the B&H produced by it was put through rigorous quality tests by scientists from both ITC and BAT and was adjudged the best quality B&H produced anywhere in the world. ITCs Bangalore factory produces the foreign brands currently.

Grant said ITC hoped the launch of the international brands would deal a body blow to the grey market for such cigarettes, which cost the government a hefty Rs 160-170 crore by way of lost revenues. It also costs the government a whopping $50 million by way of lost foreign exchange. He said he saw the brands taking up at least the grey market share of the cigarette industry, which stands at one percent of the industry or 20 per cent of the premium cigarette segment. The premium segment accounts for 5 per cent of the industry.

Explaining ITCs rationale of going in for the international brands through the licensing pact with BAT, he said: We felt there was a demand in the market for these brands. For some it is the ultimate destination and we decided to have them in our portfolio, he said. The biggest market for the top-end premium cigarettes is Mumbai, which is why ITC chose to launch B&H there.

...may turn export base

Having come out on top in terms of quality of the international brands it has produced from its Bangalore factory, ITC Ltd may also turn into an export base for the BAT brands. Bangladesh, which also has a large market for these brands, may find it more convenient to import them from India. However, ITC feels it is possible but would depend on BAT, which owns these brands in Bangladesh.