eBusiness Weekly
Tawanda Musarurwa
British American Tobacco (BAT) Zimbabwe holds 84 percent of Zimbabwe’s cigarette market, which currently stands at 1.45 billion sticks per year, a company official has said.
Although the listed cigarette manufacturer’s dominance is unyielding, the latest figure is down marginally from around 86 percent in 2017.
BAT head of legal and external affairs for Zambia and Zimbabwe Mdu Lokotfwako, said the group is looking to enhance its low value brands, which account for the greater share of its cigarette volumes.
“Zimbabwe has a market size of 1, 45 billion sticks, and BAT Zim’s annual volumes are at about 1, 23 billion sticks. Our consumers in Zimbabwe are at around 470 000 out of a total population of about 14, 8 million.
“We own a market share of about 84 percent, and this is purely based on excise duty contributions to the revenue authorities,” said Lokotfwako.
“Madison (a low-value brand) contributes about 40 percent of our total volume in Zimbabwe. We are upgrading it and will come up with more innovations around the brand.
“Ascot has done very well for us, it is one brand that entered the category very well. We are looking at a volume increase of 400% alone for Ascot.”
BAT Zimbabwe’s low-value brands recorded the biggest volume growth across the group’s portfolio in the six months period to June 30, 2018, although all segments recorded growth during the half-year.
The low value for money brands achieved a growth of 285 percent, while the premium brands recorded a growth of 37 percent, while the value for money brands attained a 16 percent growth.
He described BAT Zimbabwe as “pro-regulation.”
“We agree that as a product that poses risks to health, tobacco should be appropriately regulated….With regards to addressing some of the health implications, our business globally has invested and is continuing to invest a lot in research and development around harm reduced products like Next Generation Products.
“We find comfort in the fact that a large number of reputable international public health researchers and specialists in the areas of tobacco control, nicotine science and public health policy, like the Public Health England have recognised that NGPs may contribute to smoking cessation because they hold real potential to act as a substitute and substantially less hazardous product for cigarette smokers who do not want to give up nicotine and certain of the rituals involved in smoking.
“They (NGPs) are proven to be 95 percent less harmful than an ordinary combustible cigarette,” he said.
BAT Zimbabwe’s revenue for the half-year period was up 19 percent to $19, 8 million compared to $16, 7 million while gross profit rose 22 percent to $14, 57 million from $11, 97 million same period last year driven by improved sale volumes and efficiencies in the cost of production.
Net profit for the period jumped 60 percent to $7, 4 million compared to $4, 6 million same period in 2017.
