BAT eyes product diversification to boost income


BAT eyes product diversification to boost income
BAT Shareholder Geoffrey Nyaoga chats BAT Board Chairman George Maina and BAT Managing Director Beverley Spencer-Obatoyinbo during the BAT AGM

Global tobacco giant British American Tobacco (BAT) has put down plans to access the potential of alternative tobacco products in the country in an effort geared at enhancing the company’s profitability by diversifying its revenue base.

The move follows the success of alternative tobacco elsewhere on the globe as tobacco consumers’ taste at preferences gravitate towards next generation products.

Vapes, oral tobacco and tobacco-free nicotine pouches have gathered momentum in terms of their attractiveness to consumers’ world-wide prompting big-tobacco players to move into the emerging space.

Globally, BAT is already the world’s largest e-cigarettes maker with an array of assorted tobacco alternative brands which includes; Dunhill, Kent and Lucky Strife.

Speaking during a media update of BAT’s operations in the country, BAT (Kenya) Managing Director Beverly Spencer said growth in tobacco alternatives has been bolstered by research terming the next-generation products as those with reduced health risks.

“Globally the industry has been moving into what we would call the next generation products base which is moving into new categories of nicotine consumption which we believe to have a reduced harm impact,” she said.

Ms Spencer further added that focusing on the potential represented by alternative tobacco products will hold the key for the sustainability of firm’s growth in the country.

“We are extremely confident about the future of BAT Kenya and our ability to remain highly competitive in the combustible space with there being many opportunities to drive growth through other product categories,” she added.

BAT will however likely come under scrutiny from government in its attempt to establish a thriving alternative tobacco sector in the country.

Late in 2017, the government abruptly put a stop to the production, distribution and consumption of hookah (shisha) following a report by the World Health Organisation which equated the health risks of smoking hookah to those of traditional tobacco smoking.

In terms of legislation, there exists flimsy to no regulations as governments move to keep up with an ever expanding and evolving industry.

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Story By Kepha Muiruri
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