British American Tobacco (BAT) Uganda general manager Mathu Kiunjuri said at the annual general meeting that BAT Uganda’s total revenue increased by 6% to Sh99.5 billion (about 200 million yuan) due to increased sales volume.
However, rising inflation in Uganda increased the company’s production costs by 15% year-on-year, which, combined with an increase in illegal trade, led to a combined 6% drop in after-tax profits.
Mathu Kiunjuri said, “Our 95 years of continuous investment in Uganda proves that the foundation of our business remains solid, but the increasing incidence of illicit trade in Uganda remains a significant threat to our sustainable development.”
According to the study, the incidence of illicit cigarette trade in Uganda increased from 23.8% in December 2021 to 29.4% in December 2022. According to Kiunjuri, the government loses up to 30 billion Ugandan shillings a year from the illegal cigarette trade. Uganda is reported to be a growing source of illicit cigarettes for regional markets such as Kenya.
“The Uganda Revenue Authority has made significant progress in combating the illegal cigarette trade,” Kiunjuri said. The government must redouble its efforts to strengthen multi-stakeholder and cross-border cooperation to ensure effective enforcement of anti-illicit trade regulations.”
According to the Uganda Unified Market Association, smuggled cigarettes account for about 27 percent of smuggled goods in Uganda, with Supermatch brands accounting for more than 90 percent of seized cigarettes.
References:
【1】Smuggling, inflation stall cigarette industry recovery