Tue | Dec 12, 2017

New cigarette maker already victim of fake products

Published:Friday | December 9, 2016 | 12:00 AMTameka Gordon

Nostic Agricultural & Manufacturing Limited says local distributors are now hesitant to stock its cigarettes as counterfeit products are causing serious confusion in the market.

Contraband D&J Royal cigarettes hit the local market even before the authentic products, produced locally by Nostic, were rolled out about four weeks ago, Nostic Director Jacob Shnurman told the Financial Gleaner.

He said the counterfeit cigarettes are mainly being distributed in Montego Bay.

Nostic is the first manu-facturing outfit to emanate from the GulfRay Special Economic Zone in Spanish Town, St Catherine.

The fledgling company formed in 2015 is investing $1.4 billion in the first year of its operations, covering the factory, greenhouses, plant nurseries, tractors and other vehicles.

But the counterfeit products have already began to cramp its islandwide distribution and will likely impact the level of employment and future investment, Shnurman said.

"This adversely impacts our ability to roll out our business plan. It's a serious issue that needs to be addressed with stricter enforcement," he said.

"We need a climate for fair competition. We cannot compete with criminals in a legitimate marketplace. It is a very difficult situation for a new entrant to the market place".

D&J Royal is the company's premium brand. Nostic is the sole licensed distributor of the German brand locally.

The company was alerted to the presence of the counterfeit products in the market by the Jamaica Customs Agency roughly four weeks ago, he said.

The brands in Nostic's portfolio include Capital, Coptic Gold, Rockaway, Blaxstar and D&J Royal but, so far, only D&J Royal is being sold locally.

Assessing fallout

Shnurman said his company was still assessing the financial fallout from the competing contraband and had not yet put a price tag on it.

"It is a significant impact because of the confusion that has been created in the market-place among the vendors, and the uncertainty on which one is the genuine and which one is the contraband," he said.

"There has been a reluctance to accept our products because of the lack of enforcement against the contraband items. So even those vendors who want to handle the legal products are still having hesitancies and doubts."

The counterfeit products are labelled in Spanish, while the authentic D&J Royal is labelled in English with the appropriate health warnings, the company said in a media release.

"We adopt the highest production and quality standards in our manufacturing process and adhere to the Bureau of Standards labelling regulations and ensure that our products are manufactured safely for end users, distributors and all stakeholders," Shnurman said.

tameka.gordon@gleanerjm.com