British American Tobacco’s earnings fall 6% in Uganda

British American Tobacco (BAT) Uganda Managing Director MathuKiunjuri revealed at the annual general meeting that BAT Uganda’s total revenues grew by 6% to Shs99.5 billion (about Rs200 million), taking into account increased sales volumes, Ugandan news outlet independent related.

However, the growth in inflation in Uganda has caused the company’s production costs to rise by 15 percent year-on-year, which, coupled with an increase in illegal trade, has resulted in a uniform 6 percent drop in profit after tax.

MathuKiunjuri revealed, “Our 95 years of continued investment in Uganda is proof that the foundation of our business remains stable, but the increased incidence of illegal trade in Uganda continues to be a significant threat to our ability to achieve sustainable growth.”

Statistics from the study data show that the incidence of illicit cigarette trade in Uganda has increased from 23.8% in December 2021 to 29.4% in December 2022 According to Kiunjuri, government agencies lose up to 30 billion Uganda shillings annually due to the illegal cigarette trade. According to media reports, Uganda is increasingly becoming a source of illicit cigarettes for regional markets such as Kenya.

Kiunjuri said, “The Uganda Revenue Authority has made significant progress in combating the illegal cigarette trade. Government agencies must redouble their efforts to continuously strengthen multi-stakeholder and cross-border collaboration to ensure effective enforcement of anti-illegal trade regulations.”

According to the Uganda Unified Market Association (UUMA), smuggled cigarettes account for about 27% of the goods smuggled in Uganda, with Supermatch brand accounting for more than 90% of the cigarettes seized.