Sari-sari stores, the small neighborhood shops that serve as the cornerstone of many Filipino communities, felt the impact of soaring cigarette and alcohol prices in 2024, according to a recent study by tech startup Packworks.
Using data gathered from over 300,000 sari-sari stores across the country through its mobile platform and analytics tool, Sari IQ, Packworks reported a notable drop in sales of popular cigarette brands—Marlboro, Mighty, and Winston—as well as alcoholic beverages like Tanduay rum and Emperador brandy.
The study revealed that total sales of the three cigarette brands declined by 22% year-over-year, dropping from over P503 million in gross merchandise value (GMV) in 2023 to P392 million in 2024. Mighty posted the steepest decline at 25%, followed by Marlboro at 24% and Winston at 8%.
This dip occurred despite the Bureau of Internal Revenue (BIR) reducing the floor price for cigarette packs from P114.60 in 2023 to P78.58 in 2024, under Revenue Regulations No. 016-2024. However, high inflation appears to have offset any potential benefits from the price cut. The Philippine Statistics Authority (PSA) reported a year-end inflation rate of 3.2% for 2024.
Alcohol sales also took a hit. Tanduay rum’s GMV dropped by 17%, falling to P102 million from PHP 124 million the previous year. Emperador brandy saw a sharper decline of 22%, with GMV decreasing from over PHP 63 million in 2023 to P49 million in 2024.
Sari-sari store owners shared firsthand accounts of how inflation and price hikes are affecting their businesses. Anabel Desuyo from Negros Occidental said the rising cost of liquor, coupled with economic hardships, has reduced consumer demand. “Dahil po nagtaas ang presyo ng ibang rum at dahil po siguro sa hirap ng buhay,” she said. (Because the price of rum has increased, and perhaps because of the difficult economic situation.) In Sarangani, Anita Lagtapon added, “Hindi na ako nagbenta ng cigarettes, mataas na ang presyo.” (I don’t sell cigarettes anymore, the prices are too high.)
Packworks chief data officer Andoy Montiel highlighted that these declining sales might reflect broader economic conditions and shifting consumer behavior. “Our year-long tracking shows a clear trend of reduced purchases of cigarettes and alcohol in sari-sari stores,” Montiel said. “External factors such as price hikes and supply issues play a role, but these patterns could also indicate deeper changes in consumer preferences.”
Tax policies have also contributed to the upward pressure on prices. Under Republic Act No. 11346, signed in 2019, excise taxes on cigarettes have risen annually. As of January 1, 2024, the specific tax rate for cigars increased from 4% to 5%, with the 20% ad valorem tax remaining in place. Additionally, RA No. 11467 imposes a 22% ad valorem tax on distilled spirits like rum, along with an annually adjusted specific tax, further elevating retail prices.
Packworks CEO Bing Tan emphasized the importance of their data platform in capturing real-time insights from the grassroots level. “With our extensive network of sari-sari stores, we can closely monitor shifts in consumer activity,” Tan said. “This allows us to provide valuable intelligence to both manufacturers and retailers, helping them adapt to changing market conditions. For store owners, it offers critical tools to manage their inventory and navigate uncertain economic times.”
Packworks’ Sari IQ is designed to empower sari-sari store owners and their suppliers by delivering real-time data and analytics, aiming to improve efficiency and responsiveness to community needs.
