There is a 40 per cent tax differential between 64 mm and 69 mm cigarette categories, and the 64 mm range is priced at a significant discount. The 64 mm cigarette is available at Rs 3.5 per unit, while the longer 69 mm cigarette is priced at Rs 4.
ITC is looking to exploit this differential to push its smaller cigarettes. Analysts expect the step up from bidis to the 64 mm cigarettes will also drive growth for the tobacco major.
ITC's competitor, VST Industries, is also testing the smaller category of cigarettes in Chhattisgarh & Andhra Pradesh.
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