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Kenya: Tobacco Report Clouds BAT Kenya Profit Growth
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Business Daily (Nairobi)
30 April 2008
Posted to the web 30 April 2008
Jim Onyango
A damning report released by a British anti-tobacco group, ASH, has overshadowed a 17 per cent growth in profit before tax for cigarette maker British America Tobacco Kenya.
ASH says the profit achieved by the global tobacco company in Africa was causing ill health and deaths, pointing out that the multinational is making more profit in Africa than in the West.
BAT-Kenya will meet its shareholders in Nairobi on Wednesday to announce a 17 per cent growth in profit before tax for 2007 to Sh2 billion.
BAT-Kenya says in its financial report for 2007 that it increased its volumes by 12 per cent because of improved distribution and government clampdown on illicit trade.
BAT is celebrating 100 years of trade in Africa this year.
The company's Kenya subsidiary said it contributed Sh7 billion in government revenues in 2007. It is quoted on the Nairobi Stock Exchange and has over 5,000 Kenyan shareholders.
The ASH report released on the eve of the BAT meeting in London, says that while smoking is declining in the West, BAT's profits in Asia and Africa grew by £2 million to £470 million last year.
But speaking from Nairobi, BAT corporate and regulatory affairs manager for sub-Saharan Africa, Keith Gretton, told Business Daily: "In this context it is interesting to note that BAT's profit in Europe grew from £781 million to £842 million last year-an increase of over £60 million"
"BAT acknowledges the health risks associated with smoking and this is one of the reasons we have so visibly supported the government's passing of the Tobacco Control Act in 2007. The Act will introduce large health warnings on cigarette packs, regulate advertising and stipulate segregation of smoking and non smoking areas" said Mr Gretton.
Nairobi City Council, Mombasa and Nakuru municipal councils have banned public smoking. The councils have prescribed a Sh50,000 fine to offenders or six months in prison.
"We welcome a national framework for tobacco legislation but we have been operating our own code of conduct on cigarette marketing for many years" said Mr Gretton.
But as BAT celebrated 100 years of trade in Africa at its AGM in London yesterday, campaigners planned protests, saying the cigarette maker left heavy footprints in Africa signifying death, hunger, poverty, and environmental destruction. The campaigners condemn the use of unpaid child labour by BAT and the use of young people in its cigarette marketing strategies.
According to an analysis carried out for the campaigning charity, ASH, one person dies for every million cigarettes sold. BAT sold 101 billion cigarettes in Africa and Middle east region last year.
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Sir Richard Peto, a professor of medical statistics at Oxford University was quoted by Medical News Today journal saying that "If BAT continues selling 100 billion cigarettes a year in Africa and the Middle East, this will, in the long run, cause 100,000 deaths per year."
BAT Kenya said its relationship with tobacco farmers was healthy since it gave the farmers an option to agree on prices before the start of the growing season.
"This ensures total transparency and means the farmers know in advance the minimum price they will receive," said Gretton.
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