British American Tobacco Expects Worldwide Tobacco Use To Remain Stable In 2010

The tobacco giant, which sells such popular brands as Pall Mall

, Lucky Strike, Rothmans, Viceroy, Dunhill and Kent, intends to assure its stable position to satisfy the requirements of cigarette-lovers, no matter if they are opting for low-end products during the recession, or premium products when the economic situation gets better.

Several years ago, the World Health Organization performed a research on the global tobacco use and discovered that the rate of smoking population across the globe was likely to rise from nearly 1.1 billion in 1998 to approximately 1.3 billion in 2010, what would be a growth of around 1.5 percent each year. This report can be opposed to British American Tobacco annual report, where the company estimated a reduction in the worldwide legal tobacco market. The report showed a 1.5 percent drop in tobacco use every year within longer period of time.

Paul Adams, British American Tobaccos CEO stated tendencies showed that individual cigarette consumers would some less each, whereas smaller numbers of people would light up. Nevertheless, he added that compensating those tendencies, the number of adults throughout the globe aged 25 and more would keep growing.

The chief executive also admitted they recorded sales drops in certain markets in 2009, thus, the company considers that worldwide volumes to be under pressure in 2010 as well, since according to their estimations the international legal cigarette market, except for China, dropped nearly 3 percent in 2009 in contrast to its long-range tendency of dropping 1.5 percent.

However, pricing strategies have remained explicit, and the worldwide revenues pool was predicted to keep growing.

The company complained that in the majority of primary markets, legal sale volumes went down because smokers turned to black market products. Mr. Adams mentioned that illegal market of tobacco items untaxed, fabricated or smuggled became one of the key rivals for major tobacco companies and accounted for approximately 12 percent of global tobacco consumption.

British American Tobacco recorded an aggregate turnover of ?40.7 billion in 2009. (In European countries, like UK, profits are defined as turnover.) The chief executive officer stated that acquiring local tobacconists would continue being a very significant part of their growth strategy and stated that the companys latest purchase Indonesian tobacco company Bentoel provided the BAT with the a strong market share in the 4th biggest tobacco market in the world.

The WHO in its research estimated that more tobacco products would be consumed in developing nations, where the consumption is likely to increase to 5.10 million tons in 2010 up from nearly 4.2 million a decade ago.

by: ScarletS

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