Cigarette major ITC is considering a price increase of 8 to 10 per cent on select cigarette packs as part of a broader strategy to manage the impact of higher taxation while protecting sales volumes, according to sources familiar with the matter. The proposed price revision could be rolled out over the next 15 to 30 days, with distributors already factoring in expected changes across certain product categories. Among the products expected to see a price revision is ITC's mid-sized Gold Flake cigarette pack, with sources suggesting its price could rise to around ₹125 from the current ₹115, representing a hike of nearly 9 per cent.
ITC has launched a smaller version of its Classic cigarette brand at 75 mm length, priced at ₹17 per stick, according to dealers speaking to Informist. The new, shorter Classic variant is being made available only in markets considered price-sensitive, and is being sold exclusively in packs of 10 cigarettes. This strategic move comes as the company navigates the impact of higher excise duty on cigarette pricing. The launch reflects the company's continued focus on premiumisation and finer segmentation within its cigarette portfolio, with the ₹17 per stick pricing representing a significant reduction from standard pricing.
The move follows comments made by ITC during its recent earnings call, where the company outlined a strategic approach to mitigating the impact of higher cigarette taxes. According to sources, ITC has signalled a preference for staggered and agile pricing actions rather than a single broad-based price increase across its entire portfolio. This calibrated approach is aimed primarily at minimising the risk of consumers shifting toward illicit and untaxed cigarette trade, a persistent concern in India's tobacco market where steep tax-driven price increases have historically pushed price-sensitive consumers toward the unregulated grey market. The pricing strategy is designed to help the company offset cost pressures created by higher taxation without sacrificing volume growth.
The launch comes after the government's excise duty hike on cigarettes, which has heavily impacted volumes in what is ITC's most profitable and key revenue driver. As reported by Informist, cigarette manufacturers are typically responding to higher excise duty by either passing on the full cost increase to consumers or adjusting cigarette length to manage price points without alienating volume-sensitive market segments. The shorter stick allows ITC to keep the per-pack price more palatable for price-conscious consumers while still adjusting for the higher tax burden per cigarette. If implemented, the proposed revisions would represent one of the more notable pricing actions in India's cigarette segment this year.
ITC has not issued an official statement on the reported price hike plans, as reported by ET Now. Until an official statement is issued, the details around the scale, timing and scope of the price revision remain based on sources rather than company confirmation. Market participants are likely to watch closely how consumers respond to any confirmed price increase, as well as whether competing cigarette manufacturers follow with similar adjustments of their own. The proposed revisions would operate within India's tightly regulated and heavily taxed cigarette environment, where companies must continuously weigh the trade-off between passing on tax costs to consumers and risking volume loss to both legal substitutes and illicit trade.
