A Vice No More? Packworks Data Reveals Filipinos Cutting Back on Cigarettes and Alcohol

Despite their long-standing reputation as recession- and inflation-proof staples, cigarettes and alcohol are seeing cracks in their resilience—at least at the sari-sari store level.

Alcohol sales from sari-sari stores went down in 2024, reflecting the combined impact of excise taxes and inflation.

New data released by Filipino tech startup Packworks reveals a notable dip in the sales of these so-called “vice” goods in 2024, with Filipinos tightening their belts under the weight of high inflation and increasing sin taxes.

Leveraging insights from over 300,000 neighborhood sari-sari stores nationwide through its mobile platform and business intelligence tool Sari IQ, Packworks observed sharp declines in the sales of popular cigarette brands such as Marlboro, Mighty, and Winston, along with alcoholic beverages like Tanduay Rhum and Emperador Brandy—products often considered fixtures in corner stores across the country.

According to the findings, the combined gross merchandise value (GMV) of the three cigarette brands dropped by 22%, from PHP503 million in 2023 to PHP392 million in 2024.

Individually, Mighty registered a 25% drop, Marlboro declined by 24%, and Winston by 8%.

The trend was echoed in liquor sales: Tanduay’s GMV dipped by 17%, from PHP124 million to PHP102 million, while Emperador suffered a 22% slide, from PHP63 million down to PHP49 million.

These findings challenge conventional economic wisdom. Historically, tobacco and alcohol have been seen as resilient consumer goods during economic downturns—held up by habitual consumption, addiction, and their classification as "affordable luxuries."

But this year’s economic headwinds in the Philippines—ranging from sustained inflationary pressure to aggressive excise taxation—may be proving too steep even for these long-time mainstays.

The Squeeze at Ground Level

For sari-sari store owners like Anabel Desuyo from Negros Occidental, the data is not merely statistical—it’s a lived reality.

“Dahil po nagtaas ang presyo ng ibang rum at dahil po siguro sa hirap ng buhay,” she said, reflecting on the declining demand for alcohol in her community. (“Because the price of rum has increased, and perhaps because of the difficult economic situation.”)

Anita Lagtapon, a store owner in Sarangani, shared a more definitive response:

“Hindi na ako nagbenta ng cigarettes, mataas na ang presyo.” (“I don’t sell cigarettes anymore, the prices are too high.”)

These sentiments mirror a broader trend observed by Packworks Chief Data Officer Andoy Montiel.

“Our tracking data over 12 consecutive months indicates a significant shift in purchasing trends for cigarettes and alcohol. External factors such as price increases and potential supply constraints are influencing behavior, but we may also be witnessing the start of deeper internal changes in consumer habits,” Montiel said.

Inflation, Taxes, and Changing Preferences

The financial strain on Filipino households is palpable. Although the Bureau of Internal Revenue (BIR) attempted to ease the burden by lowering the cigarette floor price from PHP114.60 per pack in 2023 to PHP78.58 in 2024 (Revenue Regulations No. 016-2024), the effects were marginal.

The year-end inflation, pegged at 3.2% by the Philippine Statistics Authority (PSA), may seem moderate on paper—but for households already stretched thin, even slight increases in daily essentials can disrupt spending priorities.

Adding to this pressure are hefty sin taxes introduced under Republic Acts No. 11346 and No. 11467.

Tobacco products have been subject to increased excise duties and annual tax adjustments, while distilled spirits like rum face a 22% ad valorem tax on their net retail price—excluding VAT and excise tax—plus specific taxes that increase yearly.

“Even with regulatory adjustments, prices at the grassroots level remain elevated,” Montiel added. “It’s important to remember that for sari-sari store customers, a few pesos make a difference in day-to-day consumption decisions.”

Sari-Sari Stores: The Nation’s Economic Barometers

Perhaps the most striking insight from the study is not just what Filipinos are buying less of, but how sari-sari stores serve as powerful lenses into real-time economic behavior.

These humble stores—estimated to number over a million across the country—are often overlooked in formal economic reporting. Yet, they provide a hyperlocal, unfiltered perspective on the purchasing power and preferences of the average Filipino.

“With our wide sari-store base, we can take timely pulses of consumer activity at the grassroots level,” said Packworks CEO Bing Tan. “This allows us to identify critical patterns and emerging shifts early, offering valuable insights for manufacturers, policymakers, and the retail sector.”

Packworks has positioned itself not merely as a software provider but as a key intelligence partner for small businesses navigating complex market conditions.

“For our sari-store users, we provide real-time data on inventory movements, helping them adapt quickly to changing consumer demand. This is especially important during times of economic uncertainty,” Tan added.

A New Era for ‘Vice’ Goods?

The downward trend in cigarette and liquor sales may be more than a temporary dip. It could signal the beginning of a cultural and economic recalibration in the Philippines.

While traditional thinking considers these products recession-proof, Packworks’ grassroots-level data suggests that even long-held consumer habits are not immune to macroeconomic forces and changing social dynamics.

It raises compelling questions for stakeholders in both public and private sectors: Are price hikes and sin taxes succeeding in curbing consumption, as intended? Or are they simply pushing consumers to seek cheaper, perhaps unregulated alternatives? And how might shifts in vice consumption influence long-term public health and economic behavior?

For now, one thing is certain: in the alleys and corners of Filipino communities, the neighborhood sari-sari store remains more than a place to buy cigarettes and alcohol—it’s a vital pulse point of the Philippine economy.