British American Tobacco Announces Largest Annual Revenue in 14 Years

BAT Tobacco
British American Tobacco Holdings (New Zealand), the nation’s major tobacco company, revealed its greatest annual revenue since at least 1999, after profits have increased by 15 % as it reduced costs whilst elevated excise tax boosted prices.

The regional branch of British American Tobacco (BAT), whose cigarette brands include Pall Mall, Lucky Strike, Dunhill and Vogue have increased revenue to about $132 million from $115 million registered in the previous year, based on financial reports. That is the huge annual revenue the New Zealand unit has revealed based on financial reports dating back to 1999.

The company’s income, which contains excise duties, went up 3.6 % to $1.21 billion, while administrative selling and marketing costs boosted over 17 % to $60.8 million. The cost of sales, which consists of excise tax, increased by 3.6 % to $963.5 million.

New Zealand “market share was larger, even so, volume was affected by the industry compression. Revenue increased extremely caused by price boosts and cost savings,” the London-based affiliate stated in its 2013 annual report. BAT group revenue increased 3 % to 5.55 billion pounds in 2013. Its Asia-Pacific unit constituted 27 % of profits with 4.2 billion pounds in sales, offering an income of about 1.7 billion pounds.

BAT controls the local market, with its closest competitor, Imperial Tobacco, declaring sales of about $432 million in the year concluded September, 30, 2013 and other leading tobacco company as Phillip Morris revealing sales of $83 million in 2013.

The New Zealand government has been raising the tobacco excise by over 10 % annually starting 2012, raising the price buyers should pay included in the policy to make New Zealand smoke-free by 2025. The boosts are likely to raise the common price of a package of 20 cigarettes to over $20 by 2016.

New Zealand is trying to stick to Australia in launching plain packaging law in order to decrease brand popularity and reduce the cigarette market. Australia has released non-identifiable smoking products but is being sued by cigarette makers at the World Trade Organization which state the new rules are intellectual property breach.

Cigarette manufacturers have been against the plain packaging action, asking the validity and usefulness of eliminating the last mode of advertisement for their cigarette brands. As more governments crack down on cigarette use and the market gets to maturity, tobacco makers are in search of alternative tobacco products.

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