NEW YORK - British American Tobacco€™s (BAT) Australian unit, maker of the country€™s popular Winfield brand of cigarettes, introduced its first discount label €" Just Smokes €" to compete with illegal tobacco products, reports Bloomberg BusinessWeek.
BAT is currently fighting the Australian government in court over the country€™s plans to implement a plan-packaging law for cigarettes. The news source writes that Australia€™s discount tobacco market, measured by the number of cigarettes sold, has grown 63% since the government increased the excise tax by 25% in 2010.
"We€™ve never had a product in this segment before," BAT spokesperson Scott McIntyre told the news source, adding, "A few years ago, the market didn€™t exist."
Australia€™s illegal counterfeit tobacco trade has tripled from 2010 to 2011, an estimated 407,000 kilograms (897,000 pounds), based on a report by Deloitte & Touche.
The contraband market, which includes cigarettes smuggled in to the country to avoid taxes, has also more than tripled in the same period to an estimated 430,000 kilograms, according to the Deloitte report, which was commissioned by BAT, Philip Morris International and Imperial Tobacco Group.