Two weeks ago Imperial Tobacco invited me to the launch of John Player Silver, its new ‘economy’ cigarette brand.
Imperial says it has been monitoring the market for a while and felt the time was right to introduce a cheapie cigarette, the sort of product which will compete against Pall Mall. Imperial decided that £4.20 a pack was the price it had to hit if it wanted to attract ‘value’ smokers. But even it couldn’t have dreamed it would be launching into such an uncertain financial market.
Not surprisingly Gallaher didn’t want to see its ‘super value’ Sterling brand undercut and appears to have opted for a quick price cut on a brand which is already well established and accounts for 5% of total cigarette sales. Both John Player Silver and Sterling will be out there next month in £4.20 price-marked packs.
Imperial says its £4.20 price point is permanent while Gallaher is using it as a temporary strategic measure – ‘while stocks last’. And we will have to wait and see just how long that is.
Imperial is bullish about Silver and believes it will account for a 2.5% share of the market within two months. But, with such fierce competition, that remains to be seen. Either way, the customer is in for cheap smoke.
