British American Tobacco Satisfied with Investments in Croatia

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BAT’s factory at Kanfanar will focus on German market next year.

British American Tobacco (BAT) is satisfied with the results achieved in the first year of operations after their acquisition of the Rovinj Tobacco Factory (TDR). Their factory at Kanfanar exports its products to 19 markets, and starting from next year its main market will be Germany, reports Jutarnji List on December 7, 2016.

The first year after the acquisition of TDR was marked by the growth on the three markets in which BAT Adria operates (Croatia, Bosnia and Herzegovina, Slovenia), while the second year will be marked by growth in exports to Western Europe, especially Germany, which will become the main export market for the factory at Kanfanar.

The company noted that in the past year BAT had successfully integrated TDR into its global system, with the market share of TDR in Croatia increasing to 54.8 percent. Since coming to Croatia and investing more 500 million euros for the acquisition of TDR, BAT has continued to invest – this year, it invested 19 million euros, and for the next period they plan to invest additional 30 million euros in the factory at Kanfanar. The factory produces about 7.5 billion cigarettes a year, of which 60 percent is exported to foreign markets.

“As the largest investor in Croatia over the past few years, BAT is extremely satisfied with the results of its operations in Croatia, because every month we achieve growth in the market share. We have started to export our products to new foreign markets, from Greece and Bulgaria, Germany, the Netherlands and Switzerland, to Czech Republic, Spain and Poland. After the closure of BAT’s factory in Germany, part of the local production has been moved to Kanfanar, and that is the reason why Germany will become the largest export market for the Kanfanar factory next year”, said CEO of BAT Adria Ram Addanki.

However, he warned about the major problem of illegal trade in tobacco products in Croatia. In fact, between 23 and 25 percent of consumers in Croatia buy cigarettes in border areas or at illegal markets. Of particular concern is the illegal sale of cut tobacco, which places Croatia at the very top of the negative list of European countries. BAT estimates that the state budget is losing between 1 and 1.5 billion kuna per year.

“The fight to reduce the illegal market is important for consumers, for producers, and for the state. Therefore, we urge the state administration to join forces and fight together against illegal market, which is also favoured by unplanned increases of excise taxes on tobacco products. It is essential that the government precisely defines the calendar of increases in excise taxes, as this will have a significant impact on reducing the black market”, noted Addanki.

At the beginning of December, a new regulation on the excise taxes on cigarettes, fine cut tobacco and other kinds of smoking tobacco entered into force. The government adopted the regulation at its session on 24 November. The regulation established higher excise taxes on tobacco products which caused retail prices of cigarettes in recent days to increase by about one kuna per box.


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