BAT Middle East - conference on the illicit tabacco trade..

May 15, 2009 - British American Tobacco Middle East is hosting a two-day conference for key stakeholders across the region to help tackle the issue of illicit tobacco trade.

The opening ceremony is being attended by key figures including the Lebanese Minister of Finance Dr Mohammed Shateh, as well as customs and other government entities; and their counterparts from Jordan, Syria and Yemen as well as members of the top management team of British American Tobacco Middle East.

In the Middle East last year 23.6 billion cigarettes or 16.3% of all cigarettes smoked were illicitly supplied last year, approximately one in every six cigarettes. British American Tobacco estimates that this equates to a loss of excise tax for regional governments of over US$ 162.2 million annually.

Legitimate tobacco companies across the Middle East are also losing some US$102 million in annual revenue due to illicit trade as well as associated threats to companies’ brands, jobs and distribution networks.

Omar Bseiso, General Manager of British American Tobacco Levant & Yemen commented: “We fully support regulators, governments and international organisations such as the World Customs Organization (WCO), World Trade Organization (WTO) and World Health Organisation (WHO) in seeking to eliminate all forms of illicit tobacco trade. We would like to see all our markets free of it.”

Illicit tobacco trade is a global problem. British American Tobacco estimates that more than 330 billion cigarettes smoked in 2008 were illegal; amounting to 6 per cent of the total world consumption. This has a huge impact on tobacco company profits amounting to approximately US$5 billion per year and the loss in government taxes of US$20 billion in 2008.

The vast majority of counterfeit cigarettes come from illegal operators in China, followed by Paraguay, the Middle East and to a lesser extent Eastern Europe.

British American Tobacco Middle East is part of the British American Tobacco Group, the world’s most international tobacco group and the second largest stock market listed tobacco group by global market share.

It markest and distribute 15 brands in 13 countries across the Middle East, including Bahrain, Islamic Republic of Iran, Iraq, Jordan, the Kingdom of Saudi Arabia, Kuwait, Lebanon, Oman, Palestine, Qatar, Syria, the United Arab Emirates and Yemen.

British American Tobacco Middle East employs over 450 people across the Middle East. Its area head office is located in Dubai. The group’s portfolio includes more than 300 brands, the global drive brands being KENT, Lucky Strike, Dunhill and Pall Mall. Other international brands include Viceroy, Rothmans, Bensons & Hedges, 555, Peter Stuyvesant, Kool, and many others.

Imperial Tobacco Canada Ltd -- a unit of British American Tobacco - has been guilty of aiding smuggling.

Reference: Middle East governments losing US$162 million in tobacco excise taxes each year
Source: BI-ME , Author: BI-ME staff, BusinessIntelligence-Middle East, 5/14/2009.