Mighty Corp., the country’s oldest Filipino-owned cigarette producer, slammed Philip Morris Fortune Tobacco Corp., Inc. (PMFTC) President Paul Riley for making unfounded and malicious statements over allegations of fraudulent activities.
“Paul Riley’s statements are the height of irresponsibility, malice and very unbecoming of a ranking executive of a multinational company. He’s obviously very desperate to resort to this kind of lying and mudslinging,” Mighty Executive Vice President Oscar P. Barrientos said.
Barrientos was reacting to the PMFTC executive’s claim that Mighty had undervalued its imports based on its own funded and self-serving report and the study done by the Senate Tax Study and Research Office (STSRO) which is still incomplete and subject to final analysis.
“What PMFTC and Riley conveniently kept from the public is that the STSRO study used data culled from a report on alleged illicit tobacco trade conducted by the International Tax and Investment Center and Oxford Economics. This report was commissioned and funded by Philip Morris International which makes it self-serving,” Barrientos said.
“This illicit tobacco trade report has since been debunked and discredited by tobacco control organizations and health groups as inaccurate and biased. Philip Morris exerted efforts to influence government against adopting policies that affect its business,” he added.
PMFTC had controlled 94 percent of the Philippine cigarette market until 2011 when Republic Act 10351 or the Sin Tax Reform Law was passed. It lost some of its share to Mighty after the law leveled the playing field and promoted competition.
“This foreign monopolist has no authority whatsoever to speak in behalf of our local authorities because he simply wants to pressure the government to amend the RA 10351 in their favor,” the retired Judge added.
According to data available on the public domain, Philip Morris International, the company’s mother unit, has a long running history of fighting governments across continents against stricter tobacco control legislation that affects its business.
The Senate’s transcript of the Joint Congressional Oversight Committee hearing last October 22, 2014 showed that lawmakers and Cabinet officials debated on the validity of the Senate Tax Study Research Office (STSRO) study.
Barrientos said: “PMFTC anticipated the delay for this transcript to come out. It was a well-timed attack, aimed at us [Mighty] to malign our business, using us as a whipping post and push forward their ulterior motive of amending the Sin Tax Law because from the very beginning, PMFTC was against it.”
In the hearing, Bureau of Internal Revenue (BIR) Commissioner Kim Henares said the DTI data provided in the STSRO study is questionable because it only provided Philip Morris’ purely consumption entries but failed to mention that the company has a Philippine Economic Zone Authority (PEZA) transshipment and warehousing facility.
“You cannot say Philip Morris is purely consumption [entries]. I’m not saying it’s the fault of the STSRO because they got the data from DTI. But DTI does not have any data, only projections. The data they have in the first place, should have warehousing and transshipment because PEZA is under DTI,” Henares said.
“They [DTI] never asked us [BIR] for any actual data,” she added.
“The [STSRO] study is also based on the global research that was done by this group [Nielsen] that was paid for by Philip Morris,” as Henares subsequently revealed that AC Nielsen is still yet to provide the data to authorities.
The meeting ended in a consensus that the STSRO report is incomplete and data from the three other concerned agencies, BIR, BOC and NTA, will be submitted for further verification.
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