British American Tobacco (BAT) has announced healthy profits for 2011, mainly thanks to growth in developing markets and with Romania coming out as a particularly strong performer for the global tobacco giant. BAT’s financial results include Romania in the Western European region, and the company report highlights the country as one of the main drivers of regional growth.
“In Romania, excellent increases in profit and volumes were achieved as the industry benefited from the significant reduction in the level of illicit trade following the strong action taken by the Government. Market share was higher, led by Dunhill, Kent and Vogue,” reads the BAT report.
Smuggled cigarettes accounted for 15 percent of the market in November last year in Romania, up from 11.8 percent in September. Smuggling climbed back to the level reported in July 2011, after a downward trend in 2010 and in the first half of 2011. The historic maximum in cigarette smuggling was 36.2 percent of total sales in January 2010, after the increase in cigarette excises. This pushed the average for 2010 to around 15.2 percent, according to cigarette producers. The tobacco industry is one of the largest contributors to the state budget in Romania– EUR 2.5 billion in excises, VAT and other taxes in 2010.
Globally, BAT‘s revenues were 3 percent up in 2011, to GBP 15.4 billion ( around EUR 18.2 billion ) but profits increased far more, between 8 percent and 11 percent increases on basic profits, adjusted profits and share dividends. Adjusted profits from operations passed the GBP 5.5 billion mark, or roughly EUR 6.5 billion, representing an 11 percent increase on 2010.
The second largest tobacco company in the world, cigarette maker BAT’s brands include Lucky Strike, Pall Mall, Kent and Vogue, among others.
British American Tobacco is one of the so called ‘Big Five’ tobacco companies, along with Philip Morris International, Japan Tobacco, Imperial Tobacco and Altria. Headquartered in London, UK, the company was founded over a hundred years ago as a joint venture between a British and an American company.
Over the years the company has caused plenty controversy, the Nigerian government has attempted to sue BAT over marketing cigarettes to young people and numerous documentaries have criticized the BAT’s ethics, or lack thereof. The company received the Roger Award for worst transnational company operating in New Zealand and BAT lobbying in Europe has also raised concerns in recent years.
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