Smuggled cigarettes continue to impact legal industry

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Petaling Jaya, 22 July 2010 – British American Tobacco (Malaysia) Berhad (BAT Malaysia) today announced that the Group’s volumes have registered a marginal decline by 1.6% for the first six months of 2010 in comparison to the same period last year impacted by consumers down trading and high levels of illicit trade. Though the Group’s first half revenue was 1.5% higher than the preceding year, its profit after tax declined by 7.2% to RM377.3 million from RM407.2 million in 2009 due to lower volume, higher packaging cost from introduction of Dunhill Reloc and timing of marketing and overheads expenditure.

However, despite the decline in profit and volume, BAT Malaysia’s portfolio of brands performed commendably recording a year to date May market share of 60.3% which is an increase of 0.3 percentage points as compared to the same period last year. This growth was led by the strong performance from the Group’s global drive brands with DUNHILL recording its highest ever market share of 44.8%. The Group continues to lead the premium segment of the market with a year to date May market share standing at 73.9%.

William Toh, Managing Director of BAT Malaysia said, “Industry volumes contracted by 0.9% in the first half compared to the previous year which is a much smaller decline after the double digit contractions experienced in 2009, benefiting from our country’s double digit economic growth in the first quarter and the slight reduction in smuggled cigarettes. Despite the slight reduction, smuggled cigarettes remain a major thorn in our industry as it continues to have a high presence with 37.1% in the market. Smuggled cigarettes continue to be a lucrative multimillion dollar illegal market that deprives the Government of much needed tax funds, impacts legal businesses and funds organised crime.

“BAT Malaysia is highly appreciative of the crackdown efforts by the relevant authorities in the war against smuggled cigarette activities. We would like to applaud the Royal Malaysian Customs for the recent launch of its ‘Ops Pacak’ in the state of Wilayah Persekutuan which saw them took their enforcement against smuggled cigarettes to an even higher level of urgency. At the launch, RMC announced that any person involved in the possession, sale, storage, purchase or smuggling of contraband cigarettes will not be shown mercy or given any warning. Offenders will be brought straight to court and members of the public owning contraband cigarettes can be jailed up to 3 years and fined 10 to 20 times the value of the cigarettes. We believe that this highly commendable effort, together with a moderate excise increase, will certainly help to put a serious clamp on the smuggled cigarette menace,” Toh said.

On the outlook for the rest of the year, BAT Malaysia is committed to strengthening its leadership position within the tobacco industry through continued focus on reinforcing its brand portfolio, trade effectiveness, enhancing productivity and running its business responsibly.

“Given the demanding environment and barring unforeseen circumstances, we maintain our expectation that the financial results for the year will be satisfactory at best. As for the implementation of the ban on packs less than 20 sticks by the Government, it is still in its early stages and the full impact of this ban has yet to be realised,” concluded Toh.

For more information on British American Tobacco Malaysia’s financial results, please visit 

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
Mr Daniel Lui, Corporate Communications Manager at 03-7491 7311 or