The COVID-19 Pandemic And Rising Excise Excise Makes Sampoerna's Market Share Decrease

Illustration. (Photo: Unsplash)

JAKARTA - PT Hanjaya Mandala (HM) Sampoerna Tbk, or Sampoerna recorded a negative performance in the first half of 2020. President Director of Sampoerna Mindaugas Trumpaitis said that during the COVID-19 pandemic period, the company's total market share reached 29.3 percent today, or decreased. 3.1 percent from the same period in the previous year.

The decline, he said, was also followed by a decrease in the volume of shipments of 38.5 billion sticks or a decrease of 18.2 percent. Sampoerna's sales also decreased in the first semester of 2020, namely only Rp.44.73 trillion, or down 11.80 percent from Rp.50.71 trillion in the first semester of 2019.

Mindaugas said, there were two factors that had a significant impact on the company's performance which led to a decrease in sales volume. The first is the impact of the COVID-19 pandemic on the national economy, which has decreased people's purchasing power.

Then, the second is an increase in excise rates by an average of 24 percent and a retail selling price of 46 percent which has been in effect since this year.

"The COVID-19 pandemic and excise tariffs are two main factors that have had a significant impact on industrial performance, which has led to a double digit drop in sales volume," he said, in a virtual press conference, in Jakarta, Friday, September 18.

Sampoerna's cigarette sales in the first semester of 2020 reached 38.4 billion sticks, down 18.47 percent compared to the same period last year of 47.1 billion sticks. In addition, industrial volume decreased by 15 percent.

Mindaugas said the low purchasing power or consumer power during the pandemic had worsened the performance of the company coded with the HMSP stock code. Where, there was a decrease in the consumption of the company's products.

"The lower purchasing power of consumers has an increasingly rapid downward trend, namely a decrease in the consumption of products with a higher tax and price or V1 tax rate. This makes products with lower taxes and consequently sold at a lower price or V2 tax rate. and V3, "he said.

Furthermore, Mindaugas understands that the COVID-19 pandemic has an effect on the economic slowdown. Even so, the tobacco products industry (IHT) must continue to move so that it contributes to socio-economic activity and continues to maintain its contribution to the national economy.

"Sampoerna also remains vigilant on the various impacts of the global pandemic by continuously adapting to developments in the situation, as well as creating breakthroughs and innovations in its business journey to strengthen the company's leadership," he said.

For your information, in the first semester of 2020, this cigarette company controlled by Philip Morris recorded a decrease in net profit year on year (yoy). Sampoerna's net profit fell 28 percent to IDR4.89 trillion compared to the same period last year IDR6.77 trillion.