Cigarette manufacturer British American Tobacco (BAT) says weak demand for its products due to higher taxes has forced it to maintain production volumes at last year’s levels.
In a bid to shore up dwindling revenue streams, government last year increased excise duty on cigarettes from $15 per 1 000 sticks to $20 per 1 000 sticks, which resulted in a 15 percent price hike.
BAT Zimbabwe Managing director Lovemore Manatsa said yesterday that the company was operating at 75 percent capacity and would maintain the level if the sluggish demand continued.
Manatsa said the operating environment remained testing with liquidity and affordability being the main challenges.
“People just cannot afford, it is tough out there. We have remained almost flat in terms of volumes and financials,” said Manatsa.
“Basically we are trending along the same levels like in 2014 but we have got a number of initiatives that we are triggering which we hope will give us some traction for the rest of the year.”
For the full-year to December BAT reported a $13.4 million after tax profit from $3.7 million registered in prior year.-The Source