Recession hits BAT's cigarette volumes

27th Oct 2010 07:07

British American Tobacco's cigarette volumes rose in the Asia-Pacific region during the first nine months of 2010, but fell everywhere else as smokers cut back during the recession.The maker of Dunhill, Kent, Lucky Strike and Pall Mall grew market share, but volumes fell 1% to 526bn. They were up 5% in Asia-Pacific, but down 8% in Western Europe, 3% in Africa and the Middle East, and 2% in Eastern Europe.Organic volumes dropped 3% as more people stopped smoking, the illegal trade grew in some markets, and through the loss of sales in Pakistan after the floods. Industry volumes were "markedly lower" in Romania, Turkey, Pakistan, Germany and South Africa.There's been "good" growth in revenue though thanks to favourable exchange rate movements, continued good pricing and the acquisition of Bentoel in Indonesia in June 2009, though that's been partially offset by disposals.But things may not be quite so bright for the fourth quarter when the positive currency impact is expected to diminish."The challenging economic conditions, excise driven price increases and high unemployment have led to some softening of our volumes," chief executive Paul Adams said. "The recession's impact on consumers is still with us and shows no signs of abating." But he's confident the company is "on track for another year of good earnings growth".The big four global brands grew volumes by 8%, though this was flattered by stockpiling in Japan ahead of a significant excise driven price increase. Dunhill was up 21%, mainly due to brand migrations in Brazil and South Africa, Kent and Lucky Strike both grew 2% and Pall Mall 7%.