Distribution

Cigarette distribution in India is primarily through the local Paan shops (panwaadi ki dukaan).

The distribution of cigarettes follows the following model:

Factories in India include:

ITC:

• Bangalore
• Kolkata
• Munger (Bihar)
• Saharanpur

Godrey Phillips:

• Ghaziabad
• Andheri (Mumbai)
• Baramati

Distribution:

• Distributors handle volumes of 5-6 crores/month.
• An Assistant Manager along with 1-2 Sales Assistants on the payroll of ITC is present.
• Sales teams are paid and managed by the distributors
• All transactions are cash and carry

Dealers:

• Dealers deal in tobacco products and not just cigarettes.
• They drive large volumes of sales.
• Inject credit into the system.
• Have their own storage
• Supply to other retailers and paan shops
• Often buy large amounts on speculations

Small retailers sell 15-20 packs a day and make margins of 10-20 Rs/packet and procure cigarettes on a daily basis from the dealers.

Large retailers get their goods directly from company distributors.

Since 2008, the taxes have gone up by almost 5 Rs/cigarette.