British American Tobacco Hikes Prices

The world’s second-biggest tobacco firm has increased cigarette prices to counter drooping sales.

April 30, 2015

LONDON – The price of Lucky Strikes and Pall Malls has just gotten more expensive, as British American Tobacco (BAT) announced a price increase on cigarettes and other tobacco products, the Financial Times reports. The world’s second-biggest tobacco firm made the changes to offset a sharp decrease in tobacco sales.

The volume of tobacco sold plummeted 3.6% to 152 billion cigarettes during the first three months of 2015, compared with a 1% drop during the same period last year. Russia saw the biggest changes, with volume down 11%, followed by Brazil with a 6% drop and Vietnam with a 5% decline.

However, the company continues to see a positive future, citing its increase in market share despite a “challenging trading environment,” said Nicandro Durante, CEO, in a press statement. He pointed to five key brands as essential to the health of the company: Rothmans, Kent, Dunhill, Pall Mall and Lucky Strike.

BAT also has announced plans to take legal action because of the United Kingdom’s continuation of a plain packaging rule. “Legal action is not something we undertake lightly but the U.K. government has left us with no other choice. A letter before action has now been sent to the secretary of state for health, setting out in detail why plain packaging is unlawful and formalizing our intention to issue legal proceedings. This is a necessary first step,” the company stated.

Last month, Ireland joined Australia in banning trademarks and other branding on cigarette packaging. Currently, Australia has been challenged via the World Trade Organization on grounds it creates illegitimate hurdles to commerce.

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