Merchants will become less Camel: Japan Tobacco is beginning to reorganize distribution network

The second largest manufacturer and seller of tobacco products in Russia - the company Japan Tobacco International (JTI) - early reduction in the number distributors. At the end of last week, JTI has signed an agreement with Fort (St. Petersburg), providing for exclusive sale of cigarettes Japanese company in the territory of the Northwest region. Now Other companies receiving products earlier JTI directly, will be working through the "Fort". Most experts believe that, following the North-West JTI hold similar reductions in other regions.
Japan Tobacco International - second only to Philip Morris sells cigarettes in Russia (s Camel, Winston, Peter I and others). According to the company's "Business Analytica, the share of JTI in the Russian tobacco market at the beginning of last year was 15%. The company owns a factory Petro (St. Petersburg) and JTI-Yelets. The volume of sales in the past year, an estimated " '" amounted to about $ 810-830 million
In the JTI to make any comments about changes in its distribution network categorically refused. However, the head distributors of Fort Igor Bykov confirmed on Friday that his company had signed an exclusive contract with JTI cigarettes for distribution companies in the Northwest for three years. If the parties remain happy with each other, that agreement can be carried. Two other dealer from St. Petersburg ( "Take" and "Sapphire"), as well as six regional companies received subdilers contract and now will buy cigarettes from the "Fort". According to Mr. Bykov, no special requirements for sales JTI to its new distributor not pulled out.
Most experts agree that changes in the Northwest - the first step for a global reduction of the number of distributors JTI, which has already been discussed in the company for more than a year. Most likely, followed by the North-west, will be selected by two distributors in the Central region, and then will turn the Urals and Siberia.
All major competitors JTI a few years ago, have been reconsidering their marketing. For example, Philip Morris in 1996, the start of the phased reduction in the number of distributors (originally there were more than 30) - now sell products company only three distributors ( "Anoksis", "Mercury", "Teacher"). A similar conversion in 1997, held a British American Tobacco (BAT), creating the so-called Moscow headquarters five distributors; now working directly with VAT, only two companies - SNS and Tyusom. "
JTI same until recently sold directly to cigarette companies from 70 different regions of the country. Reducing the number of distributors will allow us harder to control flail situation in the regions. In addition, JTI, in exchange for exclusive certainly will require its distributors to desist from selling competitors' products.

Reynolds bought chew tobacco and snuff

Reynolds American Tobacco Corporation has agreed to buy for $ 3.5 billion company Conwood, supplying chewing and snuff. So Reynolds was the first in several years, a major producer of cigarettes, undertake expansion of the market of tobacco products not related to smoking.
Quarter in the city of Winston-Salem (North Carolina), a corporation owned by Reynolds American brands Camel and Salem. After purchasing Conwood, the corporation has become the second largest player in the market "smokeless" tobacco products (the leader of this market is UST).
In early April Bonii Herzog, an analyst with Citigroup, valued at $ Conwood 1,4-1,8 billion Thus, by entering into a deal with Reynolds, Pritskers able to substantially improve its financial position. "We believe that [the proposed Reynolds] a very high price for such assets" - said David Eydelman, an analyst with Morgan Stanley, Reynolds shares appropriate rating below market media price. "
Following the announcement of the transaction on the NYSE in the tender for 16.00 shares of Reynolds on Wednesday added weight to $ 0.84, rising to $ 110.67. To finance the purchase Corporation will allocate $ 300 million from the existing cash reserve and resort to increased borrowing in the amount of $ 3.2 billion