British American Tobacco (BAT) is almost ready to open a transit hub in the port of Piraeus, while its subsidiary BAT Greece is planning investments of €100 million over the next three years.
The multinational has already chosen a location to lease in the broader port district and is looking to close a deal with an international logistics firm within the next few days so the transit centre can be up and running by March, BAT Greece CEO Gianpiero Pazzanese told a recent press conference.
Other than the Greek market, the aim of the Piraeus hub is to also serve Malta and Cyprus, eventually expanding to 10 markets in total. It is estimated that the hub will be able to distribute 3.1 billion cigarettes a year, or €1.1 billion worth of merchandise.
Regarding the impact of the capital controls, Pazzanese said that BAT Greece spent an additional €500,000 on promotional activities in the August-October 2015 period in a bid to boost retail sales, while it already buys 15 per cent of the country’s tobacco crop.
In 2015, BAT’s turnover in Greece came to €477 million, 85 per cent of which went toward taxes. Overall, said Pazzanese, the company has paid €3.2 billion in taxes in the past five years, in a market that has seen annual legal sales drop at an average rate of six per cent.
The rise in cigarette prices and taxes has sent many smokers into the arms of the illegal tobacco trade, which currently accounts for 29 per cent of the market.
Nevertheless, Pazzanese said that in terms of consumption, Greece is BAT’s biggest market in Europe and the company is committed to strengthening its presence there.
Source: Kathimerini