BAT Confident of Achieving Market Share of 70%

Source from:  The Star 04/11/2012

PETALING JAYA: British American Tobacco (M) Bhd (BAT) is optimistic of regaining its market share at 69.7% which was achieved about 12 years ago. The tobacco giant's market share dwindled below to 60% between 2000 and 2009, but it had gain steam and seen an increase in market share in the past two years. BAT market share went up by 0.4% in 2010 and by 1.3% in 2011. Its current market share is 61.1%. "We have a robust strategy put in place two years ago and it had worked well for us. "Last year we were the only tobacco company to have increased our market share in Malaysia and we promise we will increase market share again this year barring any unforeseen circumstances," managing director William Toh told reporters after the group's AGM here yesterday. The group is confident of sustaining its market share growth momentum although it noted that the industry anticipated further challenges as it battled contraband cigarettes and higher operating costs. BAT shareholders had agreed to a recommendation of RM2.76 per share for the financial year ended Dec 31, 2011, representing a payout ratio of 98% of earnings attributable to shareholders. BAT was formed from the merger between Rothmans of Pall Mall (M) Bhd and Malaysian Tobacco Company Bhd in 2000. It distributes Dunhill, Kent and Pall Mall. "The Government has taken initiatives to address the illicit cigarette problem in Malaysia because it is losing about RM2bil in tobacco revenue. "It has not increased the excise duty in the latest budget but this would not solve the problem. It is the issue of enforcement as well," Toh said. "Illegal cigarettes are still at a very high level at 36.1% of total market which represents an estimated nine billion sticks of unregulated a cigarettes in the country," he said. He said the Singapore government had not increased excise duty for seven years and it had strict enforcement, allowing only duty-paid cigarettes in the republic. "Despite not increasing the excise duty, Singapore's excise revenue in tobacco has been increasing in the past seven years," he said. Enditem