WHILE it has seen a turnaround in FY2021, British American Tobacco (M) Bhd (BAT Malaysia) – the only listed cigarette manufacturer in Bursa Malaysia – has reiterated the need for the relevant authorities to increase enforcement to eradicate the tobacco black market.
“BAT Malaysia turned in a stellar performance in 2021 with volume growth for the first time since 2002 and profit growth for the first time since 2015,” commented its managing director Nedal Salem as BAT Malaysia concluded its 61st annual general meeting (AGM) yesterday (April 27).
“This positive trajectory was due to the reduction in tobacco black market incidence and our increase in share of market which in turn, improved revenue and profit from operations.”
“As we look into 2022, we are optimistic of BAT Malaysia’s prospects and will continue to work towards our purpose of building A Better Tomorrow in all areas, especially in reducing the health impact of our business.”
During its AGM, BAT Malaysia also shared its concern with shareholders on the tobacco black market which continues to impact the legal industry.
“The re-opening on Malaysia’s borders on April 1 may potentially increase the tobacco black market trade,” cautioned Nedal.
“On this front, we urge the Malaysian Government to focus on tackling the tobacco black market that currently commands approximately 60% of the total market and causes a loss of RM5 bil in tax revenue every year.”
“Smugglers are also now using vessels to bring in their black market goods. Hence, we urge the Government to continue to increase enforcement – especially in coastal areas – and maintain policy stability, including closing the price gap between legal and black market tobacco products.”
In a related development, Nedal said BAT Malaysia is also encouraged by the Government’s focus in regulating the vape industry in Malaysia.
“We believe any regulations must be science-based with the objective to lessen the impact of smoking,” he stressed. “Regulation will not only allow vape users access to alternatives with reduced-risk potential to smoking, but also ensure the products used are compliant to quality and safety standards.”
In its FY2021, BAT Malaysia posted a revenue increase of 14% (RM322 mil) from the previous financial year, driven by a higher volume of 10% that grew for the first time since 2002 due to a reduction in the tobacco black market incidence.
At the close of yesterday’s trading, BAT Malaysia was down 22 sen or 1.71% to RM12.66 with 161,500 shares traded, thus valuing the company at RM3.61 bil. – April 28, 2022
