UK Tobacco Firm May Call off HUF 15 billion Investment over Profit Guarantee

Source from:  Politics.hu 05/22/2013

British American Tobacco's Hungarian unit on Tuesday said a bill that would guarantee a minimum margin on retail tobacco sales could force it to postpone investments of about 15 billion forints (EUR 52m) planned for 2013 and 2014.

The guaranteed margin is expected to cause Hungary's tobacco market to contract, threatening the 400 workplaces at BAT's plant in Pecs (SW Hungary) as well as the almost 8,000 people who now rely on retail tobacco sales to make a living, BAT said.

Hungary will introduce a state monopoly on retail tobacco sales from July 1. Concession winners have already been announced and a second tender called because of a lack of interest in licences for tobacco sales in Hungary's smallest communities.

Parliament is set to vote on Tuesday on a guaranteed 10 percent margin for tobacco retailers.

Industry insiders put the margin on retail tobacco sales at present at 3-4 percent. Enditem