british american tobacco malaysia - Illicit cigarettes continue to be prevalent



Petaling Jaya, 22 April 2010 – British American Tobacco (Malaysia) Berhad (BAT Malaysia) today announced a first quarter 2010 profit after tax of RM191.9 million, which is a decline of 6.8% compared to the same period last year. The Group’s volumes also registered a decline by 2.9% from the same quarter in 2009 impacted by consumers down trading and due to high levels of smuggled cigarettes selling at very low prices.

Despite the decline in volumes, BAT Malaysia’s portfolio of brands performed commendably resulting in an improved market share of 0.2 percentage points as compared to the same period last year to record a year to date market share of 60% of the legal industry. This achievement is mainly due to the resilience of DUNHILL, inspite of consumers downtrading from the premium segment, and the strong growth performances by KENT and PALL MALL.

William Toh, Managing Director of BAT Malaysia said, “Despite the stabilisation of industry volumes in the first quarter, the industry landscape remains challenging with continued high levels of smuggled cigarettes. From an average incidence of 14.4% in 2004 to 38.7% in 2009, the smuggled cigarette problem has gone from serious to critical. Illicit trade is not just the work of small operators.  Organised crime is increasingly dominant. The rewards are very high.  A single 40 foot long container (8.5 million cigarettes) smuggled into Malaysia and sold at half the regulated minimum price could net the criminals around RM1 million in profit. When consumers light up smuggled cigarettes, they are unwittingly helping to fund international syndicates involved in organised crime.”

We are encouraged by the amplified and persistent efforts by the enforcement agencies, especially the Royal Malaysian Customs, who has announced this year that they will pay focus on charging errant retailers in the court of law when caught selling smuggled cigarettes which is of higher deterrence than compounds.”

“BAT Malaysia is committed to fully supporting all the enforcement agencies in their fight to eliminate this insidious black market,” added Toh.

For the rest of 2010, Toh said that, although operating in an extremely challenging environment, BAT Malaysia remains committed to enhancing its leadership position within the tobacco industry, supported by its strategic initiatives on Growth, Productivity, Responsibility and Winning Organisation.

For more information on British American Tobacco Malaysia’s financial results, please visit www.batmalaysia.com

About British American Tobacco (Malaysia) Berhad

British American Tobacco (Malaysia) Berhad (British American Tobacco Malaysia) emerged on 3rd November 1999 from the merger of Rothmans of Pall Mall (Malaysia) Berhad and Malaysian Tobacco Company Berhad. These two long established tobacco companies brought with the merger, experience and an unrivalled portfolio of highly successful international brands to create the largest tobacco company in the country.

British American Tobacco Malaysia manufactures and markets high quality tobacco products designed to meet diverse consumer preferences. Brand portfolio includes well-established international names like Dunhill, Kent and Pall Mall. British American Tobacco Malaysia has about 1,600 employees who are involved in the full spectrum of the tobacco industry, from leaf buying and processing to manufacturing, marketing and distribution.       

British American Tobacco Malaysia is part of the British American Tobacco group, which is the world’s most international tobacco group and the second largest stock market listed tobacco group by global market share.

For more information, please contact British American Tobacco Malaysia:

Mr Chin Tuck Weng, Corporate Affairs Manager at 03-7941 7318 or Chin_Tuck_Weng@bat.com
Mr Daniel Lui, Corporate Communications Manager at 03-7491 7311 or Daniel_Lui@bat.com


Page last updated: 07/05/2010 16:38:08 GMT