BAT Russia Reduces Cigarette Production 6% in H1

Source from:  Interfax 08/06/2009

British American Tobacco Russia produced 40 billion　cigarettes　in the first half of 2009, down 6% from the same period of　2008, BAT Russia managing director Kingsley Wheaton said at a press conference in Moscow on Wednesday. The　reduction in production can be attributed to seasonal factors, he said.　The　biggest decline in smoking is seen in the winter, while a 20%-30% increase in smoking is seen in the summer, he said. The　company's　results were also impacted by general trends on the market.　The　Russian　tobacco market contracted 3%-4% in the first half and will　continue　to　decline　at　a similar pace until the end of the year, he　said.　Growth on the market can only be expected in the second half of 2010, he said. Wheaton　also said BAT Russia's share of the tobacco market totaled 20% by volume　and　23%　by　value in the first half, down slightly from roughly 22% and 24%, respectively, in the same period of last year. The　decline in market share resulted from the fact that BAT Russia raised prices　on　its　products　at　the start of 2009 due to growth in excise taxes,　while　its　competitors　did　not　hike　prices. When the company's　competitors　reacted　to the increase in excise taxes in the second quarter　and　this　impacted　their　prices as well, BAT Russia's share of the market stabilized, Wheaton said. BAT　Russia　boosted　cigarette　production　0.5%　to　85.7 billion cigarettes　in　2008.　The company's market share by value increased 0.6 percentage　points　to　24.9% in 2008, while its share by volume came to 21.8%. British　American Tobacco has been working in Russia since 1994. It owns the tobacco plants BAT-Yava (Moscow), BAT-STF (Saratov) and BAT-SPB (St. Petersburg).　The company had invested $870 million in Russia as of the end of 2008. Enditem