India’s second-largest cigarette maker, Godfrey Phillips India Ltd, has tied up with the Oettinger Davidoff Group to launch the popular cigar brand Davidoff in India.
The tie-up will allow Godfrey to have an exclusive distribution right for the entire range of Davidoff cigars in the country.
Godfrey is currently the only tobacco company in India selling cigars in a market where some two million sticks are consumed each year. Under the distribution agreement, Godfrey will import finished packs of Davidoff range of cigars, which includes brands such as Senoritas, Panatelas, Petit Coronas, Coronas, Grand Coronas, Double Coronas and Giant Double Coronas.
Davidoff brands of cigars are priced in the range of Rs600 to Rs1400.
“With 65% market share in the Rs10 crore domestic market, we are the leaders now. Our partnership with Davidoff further widens our product portfolio and makes the company an even more formidable player in the country’s tobacco market,” said A.R. Anand, CEO (international), Godfrey Philips. “The Davidoff brands, with the official distribution arrangement, will be available in Indian five-star hotels, high-end bars, restaurants, lounges and other selected outlets like convenience stores and Godfrey’s smoking lounges,” said Arun Joshi, vice-president, cigars, Godfrey Phillips.
“This will also help the Indian consumer to get the right quality products at the right price, as these brands are made available in the official channel in the local market for the first time.”
Currently, cigars attract about 61.6% import duty and another 12.5% in value-added tax in India. “The domestic market (is growing) at the rate of over 30%, thanks to increasing disposable income and the changing lifestyle of the Indian smokers,” said Joshi. He said that with the Davidoff brand tie-up, Godfrey expects to boost its own sales to Rs100 crore in the next five years in the cigar segment, which would be a huge increase in the entire category’s sales.
Davidoff is currently the largest-selling cigar brand in the world and is sold in 123 countries through direct and franchise network.
“We see a great opportunity for us in India. With 30% growth in the market, we are confident of capturing a sizable market share in the country’s cigar market,” says Reto Cina, president and CEO, Davidoff Group.
Indian cigar market is currently composed of mostly machine-rolled products, both locally made as well as imported. Davidoff brands are primarily premium segment hand-rolled products.