A new tobacco distributor is preparing to disrupt the UK market with the launch of four cigarette brands that will offer retailers a margin of up to 11%.
BK Tobacco will launch its flagship brand Tailors in September to rival the UK’s biggest selling premium cigarettes with an RRP of £6.99 for a 20-pack. The company will launch two brands and is also working with a European manufacturer to distribute two of its products.
Managing director Matthew Betts told RN the opportunity for new brands was identified when plain packaging came into force in Australia.
“New brands which entered the Australian market when plain packaging was implemented now account for the largest growth segment,” he said. “We have taken the biggest-selling premium cigarette in the UK and replicated Tailors to be at the same flavour profile, but at a value price point.
“The great thing with this project and the reason for our success in Australia was we were able to deliver greater profit margins than the majors do.”
We have taken the biggest-selling premium cigarette in the UK and replicated Tailors to be at the same flavour profile, but at a value price point
BK Tobacco, which has been set up independent of the Australian company Mr Betts worked with, will offer retailers an average 10% margin compared to between 4% and 8% currently offered.
Mr Betts said he is working with “the major wholesalers” and supermarket chains to develop the brand, with plans to officially launch products at retailer events in September. “We’re offering retailers and wholesalers an alternative,” Mr Betts said. “Plain packaging in Australia very much eroded brand identity and it completely changed consumers’ perception on what they smoke and buy. I’ve come here with investors and set up BK Tobacco specifically to take advantage of what’s going to happen in the market.”
Alkesh Pankhania, of Best-one Sunbury, said: “I would stock it. At £6.99 for a 20-pack, the customer’s happy, and margin-wise we’re happy.”