BAT Predicts Global Cigarette Consumption to Remain Stable

BAT report reveals that pricing has remained positive and it predicts global profits to increase.

March 30, 2010

JOHANESSBURG, SOUTH AFRICA - British American Tobacco (BAT) is forecasting that the world??s consumption of cigarettes would likely remain stable at 6 trillion cigarettes a year, Business Report reports.

In the meantime, BAT said that it would seek to remain "well-placed" to appeal to consumers, whether they were trading down or up as the economy changes.

In 2004, the United Nations conducted a global tobacco consumption study and reported that the number of smokers worldwide would grow from 1.1 billion in 1998 to 1.3 billion in 2010. However, BAT??s latest report, released last week, reveals that the global legal market has declined by roughly 1.5 percent annually.

BAT said that the data reveals that individual smokers consume fewer cigarettes and the population of smokers is diminishing. "However, offsetting these trends, the number of adults in the world over the age of 20 continues to grow," said Paul Adams, CEO at BAT. "We estimate that the global legal market, excluding China, fell by 3 percent last year compared with its long-term trend of declining 1.5 percent," he said.

Despite the trends, BAT said that pricing has remained positive and that global profits would grow, though it cautioned about the rise in contraband cigarettes, which represents nearly 12 percent of global consumption.

"In many key markets, legal volumes have been affected as consumers move to illicit products," Adams said.
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