Martinne Geller London
BRITISH American Tobacco (BAT) reported yesterday an accelerated decline in the number of cigarettes sold, citing economic pressures on smokers around the world to rein in spending.
BAT’s shares fell after it joined other consumer goods makers that have been hit by cutbacks from cash-strapped consumers such as Reckitt Benckiser, Coca-Cola, Heineken and Nestlé.
The maker of Pall Mall and Dunhill cigarettes said it sold 495 billion cigarettes in the nine months ended September 30, a 1 percent fall from the year earlier, citing weakness in Russia, Vietnam, Brazil, Poland and Canada.
RBC Capital Markets said the figure implied a worse-than-expected 2.2 percent drop for the third quarter, an acceleration from the 0.4 percent dip BAT reported for the first half.
“This seems supportive of our concern that the economically driven market slowdowns we have seen in Western Europe over the last year might be making their way to emerging markets,” RBC analyst James Edwardes Jones said in a research note.
The global cigarette market is expected to shrink this year as more people quit smoking or switch to e-cigarettes and as a weak global economy curbs their ability to spend. At 7.31am in London, BAT’s shares were down 3.68 percent at £33.39 (R591), dragging down the European consumer goods index 0.85 percent. – Reuters