Philip Morris International price-drop leaves retailers at disadvantage
Independent Iqos stockists are at a price disadvantage following a drop in all support from Philip Morris International (PMI), according to retailers.
PMI, which launched the heated tobacco device into independent retail two years ago, reduced the RRP of Iqos’ Heets cartridges from £8 to £5 this month.
However, independent retailers told betterRetailing they were not informed by PMI about the changes.
East London retailer Kay Patel said: “We used to be inundated with calls, but PMI has gone dead.
“I purchased stock before the price change and can’t drop the price. I either take a hit of £3, or keep charging £8 and say goodbye to my customers.”
Nisa, Bestway and Booker currently list the Heets at a £5 RRP, and Nisa claims the 9% margin has been maintained.
The change comes as the government this month introduced a heated tobacco tax at the same rate as rolling tobacco.
Hertford retailer Hitesh Patel said: “The support has gone to big companies like Sainsbury’s. We found out about the price change from a customer.
“We can’t sell it at this price because we’ll make less than £1 a pack.”
Retailers must also arrange for a customer to meet a PMI rep in-store to sell an Iqos device.
“Independent retailers did all the donkey-work for PMI when it first launched in the UK,” said Hitesh Patel.
“A PMI rep used to come in each week, but we can’t sell the units because the support has completely disappeared.”
A PMI spokeswoman said: “Independent retailers are a critical part of our business and we rely on their active support.
“We recently announced that the roll-out of Iqos would focus on a number of major cities.
“As a result, this may have reduced the frequency of contact in certain areas.
“Any retailer who feels they need extra support should discuss it with their local area manager.”
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