Tag Archives: British American Tobacco
The Manchester-based company behind the Intellicig brand of electronic cigarette has been acquired by British American Tobacco following a deal that gives its owners a giant “lucky strike”.
If you are a fan of Marlboro, Camel, or any other famous cigarette brands, imported to India, you should better start stocking up, as Indian government is currently debating over possible restrictions on the importations of tobacco products and a total ban on foreign presence in wholesale sales of cigarettes and other tobacco products.
The measure is considered two years after India’s authorities prohibited direct investment of foreign companies into cigarette production industry.
Local Department of Finance has sent a letter to the Ministry of Commerce asking it to consider implementing restrictions on imports of cigarettes in the latest foreign trade legislation.
Australian Health Minister, Tanya Plibersek, strongly criticized a move by British American Tobacco Australia to introduce cheap cigarette brands to Australian tobacco market.
British American Tobacco – which manufactures such brands as Lucky Strike, Benson & Hedges, Vogue, Winfield, Dunhill and other brands – launched “Just Smokes” brand, available in stores across the nation for roughly 11.50 Australian dollars (nearly $11.40) per pack of 25 cigs.
A pack of 25 cigarettes retails for 16 Australian dollars on the average, mainly due to the high duties on tobacco products.
British American Tobacco Australia states it is obliged to sell low-cost cigarettes in order to be able to compete with counterfeit and contraband tobacco products massively available on black market, and according to the cigarette maker’s spokesman Scott McIntyre selling for not more than 10 Australian dollars.
Australian Minister of Health admitted she was most concerned over the impact on adolescents.
Packs of cigarettes and other tobacco products will be removed from the shelves in the supermarkets across Great Britain from Friday, as the latest legislation prohibiting their display in shops enters into effect.
Tobacco products will be stored hidden in closed shelves or under the counter according the stringent anti-smoking regulation implemented in England.
The measure obliges all supermarkets and large stores to remove cigarette displays at the points of their sale with allowed temporary displays under “particular limited circumstances”.
The law’s implementation was postponed until April 2015 for small shops, newsagents and tobacco stores in order to give them enough time to re-designate their venues.
Lawmakers claim that banning tobacco from displays will help to discourage teenagers and young adults from taking up smoking habit.
As it was expected, Ukraine has submitted a complained to the World Trade Organization (WTO) regarding the Australian government’s legislation banning logos and branding of cigarettes and other tobacco products on the grounds that the measure is an infringement of the international regulations on intellectual property.
Australia became the first country across the world to oblige cigarette makers pack their products in identical generic packs. From December 1st, 2012, cigarettes will be selling in olive-colored packs, lacking any logos or images, besides the graphic health warning labels. The world’s leading tobacco companies , among which are British American Tobacco, Imperial Tobacco and Japan Tobacco International, have pledged to contest the legislation, which Australian lawmakers plan to extend to comprise loose tobacco and cigars.
Ukraine states the peer-reviewed evidence on which the legislation is based is arguable and not sufficient, while plain-packaging regulations will not help to meet the country’s public health goals, but simply contribute to growth of the black market of fake cigarettes.
Last week, British American Tobacco reported the company’s results for nine months to September 30th, posting 7 percent growth at constant exchange rates and on organic basis, due to high pricing, even despite volumes went down and economic conditions remained challenging. Nicandro Durante, BAT Chief Executive declared the tobacco giant eyes another year of profits growth.
According to Durante, whereas the challenging market conditions continued to affect smokers in many markets, other markets are demonstrating growth. Price increases driven by excise tax growth will continue to impact on tobacco industry volumes, yet, the company managed to achieve strong performance with Global Drive Brands and reached solid growth in profits.
BAT released an interim management statement for three quarters, saying that it managed to increase overall market share in the main 40 markets thanks to continued growth of market share of its key brands.
The tobacco companies are more and more looking on cinema for promoting their products across India and neighboring countries, after tobacco advertisements were banned, according to the World Health Organization.
Lately, the cigarette makers have also been stripped of the sponsorships of social events, like music festivals and athletic meetings, what forced their shift to movie industry, the WHO declared in its report “Smokefree movies: From evidence to action”.
A study of popular movies has demonstrated that tobacco products displays boomed in Bollywood after tobacco ads were prohibited in 2004. According to the study, 76 percent of 395 top-grossing movies depicted smoking. The percentage of smoking scenes involving lead characters grew from 22 reported in 1991 up to 54 in 2002, whereas out of the 110 Hindi films shown in cinemas in 2004-2005, 89 percent contained scenes with tobacco use. The main characters were depicted smoking in 75 percent of these films.
The brand displays were equally used to promote premium cigarette brands owned by British American Tobacco and its main rival, Philip Morris International , which entered the Indian cigarette market when tobacco advertising ban took place.
Resorting to movies to promote tobacco use is a worldwide phenomenon. In the United Kingdom, where most types of tobacco ads are prohibited, Hollywood youth-rated movies contained more than 80 percent of all tobacco scenes in 2001-2006. In Australia, a 2008 survey showed that 70 percent of all films depicted smoking scenes, with 75 percent shown in top-rated movies. In Canada, a study published in 2009, showed that 75 percent of smoking scenes were contained in youth-rated films.
The smoking images contained in movies – depicting particular brand or otherwise – are usually consistent with tobacco usage adverts rather than with the images of the severe health complications related to tobacco consumption, the WHO said. Smoking in movies benefit tobacco companies and lure teenagers into smoking, the report highlights.
Hamish Maxwell, the former chairman of Philip Morris International, had admitted this fact in 1983, according to the WHO report, citing him as recognizing that it was vital to continue to use new opportunities to show tobacco on screen in order to promote smoking and keep it a socially-acceptable habit.
The World Health Organization proposed to give adult rating to all films which contain smoking scenes to reduce their possibility to be seen by minors and influence on them. An exception could be given to movies showing hazardous effects of tobacco consumption, it notes.
Some other facts mentioned in the report:
– Films have been associated with underage smoking in India, Hong Kong, China, Thailand, England, Poland, Germany, Scotland, The Netherlands, Mexico, Italy, and Iceland;
– Scenes depicting main characters consuming tobacco rose from 22 percent reported in 1991 up to 54 percent in 2002.
Nicandro Durante, recently appointed BAT CEO said that British American Tobacco showed a strong performance in the first quarter of 2011, with the market share of the global drive brands going up by 9 percent and the rate of the organic volume decrease slowing down. He mentioned that the innovative processes applied by the company allow growing market share in the top markets the company is presented it. On the same time, subsidiary volumes were down by 2.4 percent, equaling 164 billion, with organic volumes decreased by 1.8 percentage points.
Highlights of Performance
British American Tobacco performed strongly during the first three months to April 1st, achieving organic volume increase. The organic sale volume went up by 5 percent in the first quarter in permanent currency terms, demonstrating positive pricing environment. Estimated revenue at both present and constant rate was in line with previous year, which mostly resulted from the sale of Lyfra, the end of Gauloises Blondes in Germany, and cessation of the promotion programs in Brazil, all taking place in 2010.
Overall volumes from subsidiaries totaled 164 billion, declining by 2.4 percent compared to the same period in 2010, whereas organic volumes declined by 1.8 percent. The industry volumes decreased considerably in such markets as Spain, Australia and Mexico.
Nevertheless, BAT managed to increase market share in these markets. The company’s Global Drive Brands (Pall Mall, Dunhill, Lucky Strike and Kent) showed a very strong performance achieving 9 percent volume growth and share increase in several major markets.
Kent achieved 16 percent growth, contributed by share growth in South Korea, Russia, Ukraine and Romania. Dunhill share rose by 6 percent due to growth in Russia, Brazil, Romania and Taiwan. Pall Mall showed a double-digit growth as well due to great performance in Turkey, Romania and Pakistan. Lucky Strike also performed well, despite volume cut in Spain.
The strong performance was reached in trading environment which is still challenging, with industry volumes falling in several markets. Nevertheless, British American Tobacco innovative strategy contributed to the market share increase in all regions the company is presented. The Group achieved shipments growth in Japan, where the trading conditions remain significantly challenging after the massive earthquake and tsunami. The company continues to improve its cost base and applies other initiatives, such as closing facilities in Europe and downsizing factories in Australia, in order to balance its expenses.
The company has not scheduled any material events, significant transactions and financial position changes since the end of the previous year, other than mentioned in the present statement.
In addition, the Group established Nicoventures Limited, to offer adult smokers a wide range of alternative products that will provide most of the experience they get from cigarette smoking, but without significant health dangers.
British American Tobacco, the second-largest privately-owned tobacco company in the world, reported that cigarette volume shipments totaled 526 billion within the nine months to September 2010, going down by 1.3 percent versus the comparable period last year.
According to British American Tobacco Report, the company distributed 1 percent fewer cigarettes during the first three quarters of the year than during the nine months of 2009, however revenue went up due to positive currency fluctuation and acquisition of Indonesian tobacco company PT Bentoel last year.
Despite the decline in total volume, sales of the company’s major Global brands – Pall Mall, Lucky Strike, Dunhill and Kent went up by 8 percent. Sales of BAT’s four global brands rose by around 8 percent, a growth that flattered by rising consumer sales in Japan on the threshold of a large price increase caused by excise tax hike.
Organic volumes went down by nearly about three per cent in comparison to the same period a year earlier, driven by market dimensions drop and growth of black market sales in several countries. Sale volumes were as well affected by the ruined sales in Pakistan due to the horrible floods across the country. (Organic growth is growth resulting from a company’s current businesses, in contrast to Inorganic growth, which is based on various mergers and acquisitions.)
Sale volumes in Asia-Pacific region reached 141 billion, going up by 5.2 percent; Volumes in Western Europe fell by 8.2 percent to 90 billion cigarettes; volumes in Eastern Europe lost 2.1 per cent going down to 93 billion; sales in Americas went down by 0.9 percent totaling 110 billion; and volumes in Africa and Middle East region fell by 3.1 percent to 92 billion.
British American Tobacco Chief Executive officer, Paul Adams stated that trading conditions have been challenging, as industry volumes declined in a several important markets such as Romania, Pakistan, South Africa, Turkey, and Germany. In several markets, he said, there was reported down-trading tendency driven by contraband products resulting from the pressure on consumers’ available income, aggravated by significant increases in excise taxes. This especially impacted the low cost segment.
Dunhill sales grew by approximately 21 percent, in major part due to brand migrations in some markets, including Brazil and South Africa; Kent and Lucky Strike sales each went up by around two per cent; and Pall Mall’s sales rose by nearly seven per cent.
“The challenging economic environment, product price increases driven by tax rises and growing rate of unemployment have resulted in some declines in our sale volumes,” stated Paul Adams. “The recession’s effect on consumers is still there and demonstrates signs of diminishing. “However we have managed to increase market share in the most important markets, expanded the major Global Brands and reached good revenue growth.”