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BATA may launch MYO tobacco brand to tackle illegal ‘chop chop’

With media reports of a growing black market for cheap and illegal tobacco, such as $8-$10 packets of cigarettes, British American Tobacco Australia (BATA) is considering launching a Make Your Own (MYO) cigarette brand to try and capture the growing number of illegal ‘chop chop’ smokers.

BATA spokesperson Scott McIntyre said ‘chop chop’ or illegal loose leaf tobacco now makes up the majority of the illegal black market and it is being forced to compete with organised crime for market share due to the government’s failed excise system.

?urrently the illegal trade in Australia makes up 14.5% of all tobacco consumed in Australia which is nearly 2.6 million tonnes and a big opportunity for us to steal back consumers,?Mr McIntyre said.

?f we were to price the legal MYO brand competitively with ‘chop chop’ then there’s potential to capture a huge untapped market share of over 8% at the very bottom end.?br />

The product could be sold as very cheap loose tobacco in 100 or 25 gram packs. Smokers would then purchase a high tech cigarette making machine which would allow them to make consistently quality cigarettes in the comfort of their own home, BATA added.

?ince launching the cheapest legal pack of cigarettes over nine months ago, the brand has gone on to become the fastest growing brand overall in Australia and now makes up nearly 11% of all cigarettes sold,?Mr McIntyre said.

The low price segment has grown 76% in five years and cigarettes between $12 and $15 make up 56% of all legal sales. Smokers are literally walking into their corner store and asking for the cheapest pack available, he added.

Nearly 70% of the cost of a pack of cigarettes is made up of government taxes.

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