British American Tobacco sees downturn ease

The world’s second largest tobacco company has said the number of smokers cutting back in the economic downturn is moderating.

British American Tobacco (BAT), which has more than 300 brands, said cigarette volumes were down 0.6% year-on-year at 523 billion in the nine months to September 30, compared to a 1% drop last year.

Lucky Strike Original Red and Lucky Strike Original Silver cigarette packs

Lucky Strike Original Red and Lucky Strike Original Silver cigarette packs

The group said its four core brands – Lucky Strike, Pall Mall, Kent and Dunhill – were up 8%, despite excise-driven price increases and the threat of illegal trade.

Nicandro Durante, BAT chief executive, said: “While the challenging economic conditions continued to impact consumers in some markets, other markets are showing signs of recovery.”

BAT, which is second in the world to Marlboro giant Philip Morris International, said it increased overall market share across its top 40 markets.

Despite the slight decline in volumes, group revenues at BAT grew 7% in the period, driven by higher prices.

BAT said: “The environment continues to be challenging due to the current economic climate although there are some signs that the impact on volume is moderating.”

Asia-Pacific and Eastern Europe, Middle East and Africa saw volume growth, while Americas and Western Europe saw a drop in numbers of cigarettes sold.

Kent cigarettes grew 9%, driven by Russia, Romania and Ukraine, while Dunhill was only slightly higher, boosted by Taiwan and Brazil.

Elsewhere, Pall Mall surged 12% thanks to sales in Pakistan, Russia, Germany and Romania and Lucky Strike was up 9% following good growth in Germany, France, Argentina and Chile.

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