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Informist, Tuesday, May 19, 2026

 

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--Dealers: ITC mulls Gold Flake Premium price hike to INR 13-14/stick in June 
--CONTEXT: ITC Gold Flake Premium price is INR 11.5 per stick now 
--Dealers: ITC mulls another price hike for Wills Navy Cut in Jun-Jul 
--Dealers: ITC mulls raising Wills Navy Cut price to INR 15-16 per stick 
--CONTEXT: ITC Wills Navy Cut price is INR 14 per stick now 
--Dealers: ITC mulls raising Flake price to INR 9.5 per stick in June 
--CONTEXT: ITC Flake price is INR 7.8 per stick now 
--Dealers: ITC mulls raising Silk Cut price to INR 8 per stick in May-June 
--CONTEXT: ITC Silk Cut variants priced at INR 5, INR 6 per stick now 
--Dealers: ITC Flake cigarettes in short supply due to stock clearance 
--Dealers: ITC cigarette sales dropped 20% in April-May due to price hikes 
--Dealers: Many consumers moving to lower priced variants on ITC price hikes 

 

By Avishek Rakshit

 

KOLKATA – After increasing prices for most of its cigarette brands Feb-Apr in a staggered manner, ITC Ltd. is planning to hike prices of its Mini Kings brands further in the second tranche, dealers aware of the company's plan told Informist.

 

Dealers said that ITC is planning to raise prices of Gold Flake Premium--its best-seller Mini Kings brand--by at least 13% in June to INR 13-INR 14 per stick. ITC had already increased prices of this brand of cigarettes to INR 11.5 per stick in February from INR 9.5 per stick after the government raised taxes on cigarettes sharply effective Feb. 1. 

 

Compared to the usual Kings size of 84 mm cigarette length, Mini Kings are usually sized at 69 mm and are priced much lower than the Kings variants. However, in the Mini Kings space, various other cigarette lengths exist like the 64 mm Flake--ITC's bestseller in East India and the 74 mm Wills Navy Cut--another popular brand in East India. 

 

Dealers expect prices of Wills Navy Cut to rise further to INT 15-INR 16 per stick from the current INR 14 per stick. Like Gold Flake Premium, ITC had raised prices of Wills Navy Cut as well in February to INR 140 for a pack of 10 cigarettes from the previous INR 110. Dealers said that ITC may raise prices of Flake to INR 9.5 per stick from the current level of INR 7.8 per stick.

 

However, the Silk Cut variants may see prices inch up for the first time under the new tax regime to INR 80 for a 10-stick pack from the current level of INR 50-60 per 10-stick pack.  

 

Under the new goods and services tax regime, the tax on cigarettes was increased to 40% from 28% previously. Additionally, the government imposed an excise duty in the range of INR 2,050-INR 8,500 per thousand sticks based on the length of the cigarette which came into effect Feb. 1. This tax reform effectively increased the actual net tax rate on cigarettes to around 60-65%  which is closer to the 75% tax suggested by the World Health Organization to curb smoking. 

 

While the higher priced and high margin Kings category is the top-line generator for cigarette companies including ITC, the Mini Kings are the volume drivers on account of comparatively higher affordability than the Kings brands, a senior industry official said.

 

"Distributors have clearly indicated that ITC's cigarette prices are set to increase again for the lower priced brands," Ananda Roy, who owns a cigarette shop named Moti Variety Stores in Kolkata said.

 

Usually, distributors anticipate price hikes in those brands whose supplies shorten. When companies increase prices, they take some time to roll out the new printed packs with updated prices and give distributors some time to clear old stocks which have older prices. 

 

"Supplies of Flake brand is acutely low and so, we think that prices of Flake will rise in June. Silk Cut supplies are also low as well and our distributors have told us to clear old stocks of Silk Cut and Flake at the earliest," Roy said. 

 

Distributors acknowledged that some brands manufactured by ITC are short in supply even after ITC rolled out the new price printed packs. These brands majorly include Flake, Gold Flake Premium, Wills Navy Cut, and Silk Cut. 

 

""Usually, it happens that when prices are slated to increase. The new prices have to be printed on the packs and that is when the supply shortage kicks in. Companies need time to ready the new packs with the updated prices and thus there is some shortage in supplies," one of the distributors in Kolkata said. 

 

Dealers are, however, worried about further increase in prices. 

 

"Sales is already down by 20% during Apr-May as compared to March. In March also, sales were badly hit after the price increase. I think sales will go down further once prices increase further," Roy said. "Many consumers are downgrading their purchases to Mini Kings brands as Kings brands have become unaffordable."

 

MINI KINGS BEAR THE BRUNT

 

Historically, cigarette companies have hiked prices of the King sized cigarettes more than the Mini Kings size as the latter is extremely price sensitive. In 2021, ITC reduced the size of the Flake brand of popular cigarettes to 64 mm just to bypass the impact of higher taxes and keep prices stable. However, it increased prices of the Kings portfolio significantly.  

 

The government imposes taxes on cigarettes based on their length and the tax progressively goes up as the length increases. 

 

"The demand elasticity is much less in the Kings category as compared to the regular variants. A price hike of just a Rupee per stick is enough for consumers to change their preference and shift over to other brands," the industry official said. 

 

Although at a basic level, a tax of INR 2,700 per 1,000 cigarettes translates to INR 2.7 per stick on paper and an INR 11,000 levy implies increase of INR 11 per stick, the final calculation of price hike is quite complex.

 

Industry officials said that companies usually have the choice to revisit the tobacco cuts and blends, work around with the filter and paper, and also increase prices of some variants more than the others to minimise the impact on sales volumes and revenue. Rolling out sub-brands under an umbrella or mother-brand is also an alternative, they say. 

 

In a report, brokerage Anand Rathi Share and Stock Brokers Ltd. said that a potential 17% price hike reinforces ITC's strong pricing power in a highly regulated category, enabling it to largely pass on excise-led cost inflation and protect margins. However, near-term volumes may remain under pressure especially in premium segments.

 

As cigarette prices have stabilised over the years, ITC, which has over 70% market share in the cigarette market in the country, have been reporting a 4-6% quarterly volume growth for the past several quarters. 

 

At 1243 IST, shares of ITC traded 0.6% higher at 312.00 on the National Stock Exchange. End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Akul Nishant Akhoury

 

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