According to recent figures released by the Tobacco Institute of India, overall sales volumes of the industry was down by 6.98 per cent to 43,516 million sticks in first half to September 30, 1999, from 46,780 million sticks in the corresponding period last year.

According to a company spokesperson, ITC which has a market share of around 66 per cent has maintained its shipment volumes. Sales increased 2.8 per cent to 5,394 million sticks during September 1999 from 5,246 million sticks in the previous month.

On the other hand, industry sales went up 2.5 per cent to 8,152 million sticks in September from 7,952 million sticks in August.

In fact, the company spokesperson pointed out that while sales of other players have increased 1.92 per cent in August and September, ITC attained a 2.8 per cent growth.

In addition to sales being traditionally sluggish during the lean monsoon months, sales would have been higher had it not been for the massive hike in excise and local taxes on micro-cigarettes and rampant smuggling of cigarettes.

The spokesperson said that a fresh 10 per cent levy on account of excise and another 40 per cent for local tax have stopped bidi smokers from switching over to mini-cigarettes. He said that the "conversion of bidi smokers to micro-cigarettes did not happen".

However, market analysts feel that the hike have forced micro-cigarette smokers at the lower end of the market segment to switchover to bidis.

Echoing chairman YC Deveshwar's view expressed at the last annual general meeting, the spokesperson pointed out that rampant smuggling of cigarettes from neighbouring countries is already adversely affecting the exchequer by an estimated Rs 1000 crore, of which Rs 600 crore is through foreign exchange drainage and another Rs 400 crore is by way of tax revenues.