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Kumbirai Tarusarira Business Reporter
British American Tobacco Zimbabwe (BAT) volumes fell 18 percent in the nine months to September 30 2019 compared to the same period last year due to continued pressure on the consumer disposable incomes.
The Zimbabwe Stock Exchange (ZSE) listed company’s secretary Pauline Kadembo said the group’s operations were met with a number of challenges, which in turn likely contributed to constrained consumption.
BAT’s total sales volumes for the year to December 2018 increased 16 percent compared to the 2017 prior comparative period.
“During the period under review, the operating environment remained challenging characterised by shortages of foreign currency, devaluation of the local currency, high inflation and persistent power outages,” said Kadembo.
BAT’s premium brand, Dunhill, which constituted 2 percent of the total volume, recorded a 92 percent decline.
The decline was attributable to difficulty in importing the brand as the excise duty is payable in foreign currency.
Similarly, premium brands like, Newbury and Kingsgate, saw a single-digit decline of 3 percent compared to same period last year.
The value for money segment constituted by Everest and Madison went down by 17 percent whilst the low value for money brand, Ascot, was 27 percent down compared to the same period prior year.
The cigarette excise regime was changed from a single specific excise regime to a mixed regime system specific rate and ad valorem.
The aforesaid challenges gave rise to depressed consumer uptake.
Resultantly, the company implemented a pricing strategy aimed at mitigating cost pressures as well as protecting volumes.
Notwithstanding the fall in volumes, the company posted positives with regard to turnover for the period under review.
“Despite the decline in volume, the Company recorded a growth in revenue and still remains profitable,” said Ms Kadembo.
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