Japan Tobacco International and British American Tobacco control over 61% of sales and some 70% of the value of the cigarette market in Iran, according to the CEO of the Iranian Tobacco Company (ITC) who believes that current regulations simply encourage local manufacturing by foreign brands.
Speaking in a press briefing on Monday, Siavash Afzali said that the JTI and BAT were responsible for 46 billion cigarettes supplied to the Iranian consumers in the calendar year to late March.
Afzali said ITC’s share of the market was around 9 billion over the same period against an estimated supply of 20 billion cigarettes that entered the market by traffickers.
The remarks were made on the back of reports suggesting that the Iranian parliament is preparing to publish the results of its investigation into the ITC and its operations in recent years.
The ITC managed to increase its cigarettes sales in the Iranian market by 50% in the year to March. Output and market share of the company also increased by 23% and 70%, respectively, over the same period.
However, the company is responsible for only 5% of the value of the cigarettes sold in Iran, a market which is believed to be worth around 400 trillion rials ($1.74 billion).
Afzali said that the ITC is capable of tripling its cigarette output to 25 billion per year although he insisted that existing laws mostly favor local manufacturing by foreign brands.
“Foreign companies easily import raw material and control the market,” he said, adding that the ITC had a much larger share of the job creation in the tobacco sector in Iran than the JTI and the BAT by employing a population of 12,000 which includes the farmers.