It takes some doing to have a worse reputation than Goldman Sachs at the moment, but companies including British Airways, Royal Bank of Scotland and the owner of the Daily Mail have managed just that.

The image of the American investment bank is in tatters after US financial regulators charged it with a $1bn (£660m) fraud, but a survey saw it score better than some of the UK’s largest companies after scandals, strike action and shoddy service stuck in consumers’ minds.

Utility companies Thames Water, Severn Trent and Scottish and Southern Energy, the state-controlled RBS and Lloyds TSB and British American Tobacco (BAT) and Imperial Tobacco, came bottom in the survey of 6,000 consumers by the Reputation Institute. The bottom 10 also included National Car Parks (NCP), Phones 4U and Daily Mail & General Trust.

The top 10 was dominated by big high street names, with Boots the Chemist the most admired and John Lewis Partnership, Marks & Spencer, Debenhams and Morrisons close behind. Dairy Milk-maker Cadbury, bought by American conglomerate Kraft earlier this year, came third.

Researchers found that the recent strike action by BA cabin crew had weighed on consumers minds with the airline ranking 114th – below Eurostar which was heavily criticised for its treatment of passengers stranded in the Channel tunnel.

“Companies are quick to champion their customer service but it is clear events like striking staff and poor service stay in the mind of the public,” said Reputation Institute UK managing director Seamus Gillen. “The aftershocks of the banking crisis have also been felt since our last report, leading many people to lose their trust in some of the country’s biggest brands.”

Loathed by drivers around the country, NCP only just escaped bottom place thanks to cigarette giant BAT – and was just ahead of RBS, which received billions of pounds after the excesses of former chief executive Fred “the shred” Goodwin brought it to its knees.

Oil giant BP was ranked in mid table alongside the likes of Vodafone and the London Stock Exchange but after the Gulf disaster is likely to take a tumble if the exercise is repeated next year.

According to the research British Sky Broadcasting (BSkyB), which brings us Premiership football and Hollywood blockbusters, is held in lower regard than the Royal Mail which delivers our post. BSkyB also ranks below its free-to-air rival ITV, which with hit shows such as X Factor and Britain’s Got Talent came in the top 25.

The hammer will fall on a massive site belonging to British American Tobacco (BAT) in the Boland town of Paarl. According to Jonathan Smiedt, CEO of the ClareMart Auction Group, who will be conducting the auction, his Group recently received instruction from BAT to submit the property to public auction. “We are privileged to announce that BAT mandated our Group to sell this massive facility” says Smiedt. The more than 5 Hectare property, which borders on the Berg River will be sold to the highest bidder on Tuesday 8 June.

Describing the site as a “rare find” Smiedt explains that the property falls within the CBD of Paarl; “It is not often that a massive footprint within an urban node comes on the market, this is a rare opportunity to develop more than 5 Hectares of land within the already developed urban zone” says Smiedt.

A spokesperson for BAT, confirms that the cigarette giant decided to consolidate all its manufacturing and operational activities to their Heidelberg plant in Gauteng. All activities ceased at the Paarl plant at the end of 2007, resulting in the properties being put up for auction.

The property comprises of prime river facing industrial zoned land with improvements and is bordered by three roads. It is located in the Eastern side of the Paarl CBD, an area seeing many new retail and residential developments. Its prominent position on the corner of Lady Grey and Berg River Streets makes it a landmark site with excellent exposure to passing traffic. The property is ideally located in the vicinity of the Paarl Mall and several new upmarket residential developments. “The site is ideal for redevelopment and the Council have indicated that applications for mix-use residential and commercial redevelopments will be seriously considered. The scope for developers creating a new lifestyle development which takes advantage of the Berg River frontage and its central location will be a favourable factor for an investor” says Smiedt.

The Rembrandt Tobacco Corporation established in 1948 by the late Dr Anton Rupert, obtained the land along the Berg River and a modern cigarette and tobacco manufacturing plant was established over the decades. This plant was ahead of its time and the first manufacturing machines of long filter cigarettes were installed at the Rembrandt Group factory in Paarl in 1952, making it the most state-of-the-art manufacturing plant in the world at that time. The plant has been relocated to Heidelberg in Gauteng.

The current property offers an industrial zoning, with 75% coverage and offers a height restriction of six storeys. The building line runs at 4.5 meters along the Berg River and Dorp Streets on the present erf.

The main factory building comprises administrative offices, the core of the processing plant and certain auxiliary services. The 2773m² administrative offices are primarily partitioned, mostly consisting of drywalls. This ensures flexibility and the ability to adapt the area to comply with current industry standards. “Any new owner will be able to knockdown drywalling and create office space that works for them” says Smiedt.

A large 3463m² open plan packing factory is one of the original warehouses and is in a good condition. A key feature of this area is the extensive internal ceiling / cladding and other ‘cosmetic’ improvements made by BAT, as well as the ample air-reticulation and extraction equipment. “As a result, power supply to this area as with the entire property, is well above normal criteria for typical industrial buildings,” adds Smiedt.

The 4571m² open plan cutting area is similar to the packing factory but includes ablution facilities as well as secondary office accommodation. A 140m² staff entrance and security area is located in a renovated Victorian dwelling situated next to the main entrance gate.

The 6945m² double storey production factory is more modern than the rest of the buildings on site. The ground floor area currently occupies most of the technical maintenance departments which includes numerous workshops, storage areas and offices. The upper floor is used for production, and is a large open plan area fitted with relevant equipment. Vehicle access to this level is made possible with a ramp. The entire site is fenced in with electrified security fencing and access to this section is restricted to three points.

Approximately 15 000m² of land is dedicated to sport and recreational facilities and currently comprises three identical residential dwellings, a staff recreational complex and shaded parking areas. According to Smiedt rezoning to potentially high density residential should not be discarded, “The property is situated next to a residential area and has a large river frontage that could be exploited, but the buyer should also consider the fact that this property has industrial electricity supply and can be operational within a very short period of time,” adds Smiedt.

Included in the auction, are two property across the road at 43 and 45 Synagogue Street, which are located on the corner of Berg River Street. The property consists of two virtually identical, semi-detached single storey houses. These properties were utilised as staff quarters for the Rembrandt Group.

“We have already had interest from two consortiums which we received after being mandated and we are expecting local and international interest at the auction” says Smiedt. Those interested in viewing these properties may do so by appointment.

The popularity of brands such as Lucky Strike and Pall Mall cigarettes continues to boost sales at British American Tobacco, although the company said that a shrinking tobacco market and cash-strapped consumers were denting cigarette volumes.

“Our consumers are finding economic conditions difficult and volumes suffered as a result of market size declines,” said Paul Adams, chief executive of British American Tobacco.

“However, there was continued pricing momentum and good growth in market shares, leading to solid revenue growth. We remain on track for the year.”

Sales volumes of Lucky Strike grew by 8 per cent in the three months to the end of March, whilst Pall Mall grew by 10 per cent. The Dunhill brand increased volumes by 24 per cent, after BAT changed the brand of its Carlton cigarettes in Brazil to “Carlton by Dunhill”.

In the three months to the end of March, revenues in constant currencies grew, helped by the acquisition last year of the Indonesian tobacco group Bentoel Internasional Investama, although BAT declined to give figures for the increase in turnover.

However, in spite of this sales growth and the gains made in its major brands, total cigarette volumes fell in the period, with organic volumes down 4 per cent, whilst volumes from BAT’s subsidiaries down by 1 per cent.

BAT attributed some of the decline in volumes to a reduction in the size of the overall tobacco market, with total tobacco consumption falling fastest in the markets of Brazil, Japan, Ukraine and Romania.

Notwithstanding a reduction in the size of the Japanese tobacco market, Asia Pacific was the only region in the world where BAT increased its sales volumes, with the group selling 45bn cigarettes, up 5 per cent on the same period last year. The region now accounts for 25 per cent of sales volumes.

In eastern Europe, however, sales volumes fell 7 per cent to 25bn cigarettes, with volumes also falling in western Europe, Africa, and the Middle East, although stable in the Americas.

Shares in British American Tobacco fell 14½p to £21.26 on Wednesday.

By John O’Doherty
Ft, April 28 2010

TOKYO, – In an unusual move, British American Tobacco Japan Ltd. said Monday it has withdrawn its application filed with the Finance Ministry last month to raise the prices of its cigarette brands.

The third-largest seller of tobacco in Japan withdrew the application following recent calls by the government for smoking bans in public places which, if implemented, could cause demand for tobacco to plunge.

In late February, the health ministry issued a nonbinding instruction urging local governments across Japan to work toward a total smoking ban in public places to help reduce health risks linked to passive smoking.

Subject to Finance Ministry approval, BTA Japan had planned to raise prices of all of its 50 cigarette brands, including Kent, by 20 yen per pack from June 1.

In announcing the withdrawal of its application, the company said it needed to watch trends in the tobacco market for the time being.

Earlier this month, the Finance Ministry approved an application filed by Philip Morris (NYSE:MO) Japan KK, the second-largest seller of tobacco in Japan, to raise prices of its cigarette brands, including Marlboro, by 20 yen per pack from June 1.

Raising prices in spite of the recession buoyed profits at British American Tobacco, which makes Dunhill, Kent and Lucky Strike cigarettes.

Revenue for the year to December 31 rose 17 per cent to £14.2bn, boosted by acquisitions and favourable foreign exchange movements as well as higher cigarette prices. Pre-tax profit rose almost 11 per cent to £4.08bn.

Like-for-like volumes fell 3 per cent, but this was outweighed by rising prices for most of BAT’s brands in most countries.

Paul Adams, chief executive, said: “We do think the worst is over in terms of declining industry volumes and downtrading. ”

Sales of three out of BAT’s four core brands grew, but Kent, the company’s premium brand, suffered a 4 per cent drop in sales.

Diluted earnings per share rose 11 per cent to 136.3p and the total dividend rises 19 per cent to 99.5p after a final of 71.6p (61.6p). Rival Philip Morris International announced this month that it would return more than $12bn (£7.9bn) to shareholders via a buy-back. But BAT said its share buy-back programme would remain suspended.

“We’ve given more money to shareholders in dividends this year than in dividends and a share buy-back last year,” said Ben Stevens, finance director. “We’re not indicating that there’s a big acquisition out there, we’re just committed to maintaining our triple B-plus credit rating.”

Mr Stevens said that if BAT was to make acquisitions they would be in North Africa and Asia.

BAT, world’s second-largest listed tobacco company, said it was on track to achieve its target operating margin of 34 per cent by 2012. This year, it saved £239m of its £800m cost-saving target for 2008-12.

The shares fell 51p to close at £21.80.

Simon Chapman, professor of public health at the University of Sydney, has been taking a close look at a new report, prepared by Price Waterhouse Coopers for British American Tobacco, and has found it has more holes than a slab of Swiss cheese (or whichever metaphor you prefer).

He has given the report a big, fat F.

Chapman writes:

“Australia’s tobacco industry is having a major attack of the vapours following recommendations made by the government’s Preventive Health Task Force last year. Its chief concerns are with a proposal to push the price of a pack of cigarettes to $20 in two tax increases, bringing us into line with UK and Irish prices, but still around $3 behind Norway.

The other would see local industry internationally humiliated as being the first anywhere in the world to have to sell cigarettes in plain boxes with only the brand name to differentiate the products. Just like prescribed drugs have always been packaged. Local management don’t want that blight on their CVs.

The bogeyman of a booming black market in tobacco is the frontline of its attack on the tax rise. British American Tobacco has got out of the blocks in 2010 last Friday releasing a commissioned Price Waterhouse Coopers report on the use of illegal, tax-avoiding tobacco. I will be setting the report this year as an exercise in critical appraisal for my public health students. It is quite something.

BAT thinks tobacco products are already outrageously expensive because smokers are already turning into criminals and buying hot goods from … well, just about everywhere tobacco is sold.  So much in fact, that $624 million in tobacco tax is being avoided, they say.

We learn that half of smokers are aware of illegal tobacco and according to a Roy Morgan study commissioned by BAT, half of these (ie: 25% of all smokers) have purchased it. So if you believe the report, 12.3% of all tobacco now consumed in Australia is illegally purchased: about 1 in 8 cigarettes and roll-your-owns.  Let’s pause and get this in perspective. Globally, an upper limit of 8.5% of tobacco sold is estimated to be black market, but most of this occurs in nations with high corruption indexes like most of Africa and the former Soviet states. BAT is saying that Australia is in that league.

Contrast this with findings of the 2007 National Drug Strategy Household Survey, (amazingly, not compared or even referenced by PWC) which found that, while 8.7% of adult Australians had ever smoked unbranded, only 0.2% of the population (around 33,000 people) used it more than half the time.

• A core claim of the PWC report is that loose “chop-chop” tobacco constitutes 83% of the total volume of illegal tobacco sold (the rest being counterfeit or smuggled), and yet only 2% of smokers in this survey regularly bought chop-chop (see p1). The report fails to specify the average amounts purchased by smokers who purchased at varying levels of regularity, but at an estimated total of 2,119,000 kgs per year, this would have to require astronomical levels of consumption of illicit tobacco by these 70,000 or so smokers.
• The report is strewn with semi-literate writing (“Figure 7: Unbranded tobacco is predominately purchase loose in bags”) and the authors misspell the name of one of the largest tobacco manufacturers in the world, Philip Morris. The lack of transparency is staggering. The key table, table 7, states that the estimated number of unbranded tobacco users, point 4, is 13% based on “extrapolating 5 to 6”. No note 6 appears in the table, and Note 5 is calculated using the estimated quantity of tobacco multiplied by the estimated number of unbranded tobacco users (which was what was listed as point 4!).  No estimates are provided anywhere of the total number of smokers in the population, or the source for such an estimate.  If the estimated number of purchasers is calculated from the percentage of smokers who have reported purchasing the product, (presumably, purchasing it on any occasion in the last year, (13%)), then PWC must be assuming a total 3.9m smokers. But current estimates of the number of Australians (14 or 15 years and over) who smoke at least weekly range from 3.1m (NDSHS 2007) to 3.3m (ABS Nat Health Survey 2007).

• Something is fundamentally wrong with the estimates of the amounts and frequency of purchases. The 403 gms of unbranded tobacco purchased 11 times in a year represents around 6820 RYO cigarettes (based on an average of 0.6 gms of tobacco per cigarette), or an average of 19 cigarettes per day (403*11/.65=6820 divided by 365 days). While it is possible to believe that someone who exclusively or almost exclusively smoked unbranded tobacco smoked 19 illicit cigarettes every day last year, this is simply not plausible as an average for all the people who have ever purchased any quantity in the last year, i.e. including those who have purchased them on just a few occasions. According to the NDSHS (refer Figure 4.1), around 150,000 Australians exclusively use roll-your-own tobacco: the rest of the estimated 780,000 smokers who ever use RYO also smoke tailor-made cigarettes. And yet, the PWC report estimates that 507,000 Australian are purchasing well over the average number of cigarettes smoked daily as unbranded tobacco – more than five times the number of estimated regular, exclusive RYO users.

Now, with $624m going missing each year, we might assume that this news would have caused considerable interest in Canberra since a similar tale was told in a 2007 report, oddly cloaked  in the same nationalistic pleas to hold taxes down for the benefit of  Treasury (and no mention of what BAT might project in increased sales from lower tax) .

So the obvious question to ask is this. If every fourth smoker has bought hot tobacco  — mostly from suburban tobacconists and markets, with – get this — nearly 10% buying from supermarkets –  then why aren’t these places swarming with plain clothes federal police, daily busting what must be hundreds if not thousands of these tax-evading, bold-as-brass illegal suppliers?  Don’t think the customers are street savvy young people experienced in looking over their shoulders as their buy dope and speed. The report assures us they are mostly low income, older males, notoriously difficult for federal police to simulate in their investigations.

So why is finding and busting these places beyond the wit of the federal police? For the simple reason that it’s nearly all total nonsense.

The clues to this are not hard to find.  Significantly, nowhere in the report is there any data on how many people were interviewed for this “survey”, how they were recruited, what the refusal rate was, what questions were asked or what the characteristics of the sample were. Most crucially the report fails to state how it defines “users of unbranded tobacco” – anyone who has ever used unbranded tobacco, anyone who has used it in the past 12 months, or perhaps anyone who has used it in the past 12 months more than 50% of the time?  A Friday email to BAT’s head of spin asking some these basic questions remains unanswered.

Imagine a stranger phoning or coming to your door and asking whether you regularly purchased illegal tobacco.  “Sure, what would you like to know? I’m not in the least bit worried about what might follow from such disclosures.” But the reliability of the answers would be dodgy for a far more fundamental reason. Counterfeit or illegal brands are often  indistinguishable from the real thing. And it’s not that they might taste differently: it’s been known for decades that many smokers can’t even tell their own brands when the pack is blinded.

Asking smokers to tell you if the pack they have is legal or illegal is simply useless. The gold standard used in studies estimating use of illegal tobacco involves highly detailed checking of the pack by skilled counterfeiting specialists and analysis of the tobacco to compare it to local blends to look for often large differences. The study seems blissfully unaware of these basic problems.

Like the owners of the White Star Line expressing concern that the Titanic passengers might get splinters from the handrails, the report is full of feigned horror at the extra health risks like inhaling mould that illegal tobacco might contain: “These cigarettes labelled with fake branding pose health risks to consumers as production facilities are unregulated and do not have to adhere to the strict production standards which licensed manufacturers follow.”

Remember, these are the same strict production standards that allow cigarettes to walk out the factory door oozing with over 60 known carcinogens and which will kill half of long term users when used according to the manufacturers’ instructions.

Another hint of the quality of the information is found in when, without blinking, the report notes that 13% of illegal purchasers said they would increase their illegal purchases if laws went ahead (as they have) to require retailers to cover pack displays. Try and figure that one.

The amateurishness of this report is jaw-dropping. If a student was to hand in an  assignment of this standard, I would fail it badly. That BAT was prepared to actually release this nonsense speaks volumes about its public affairs quality control.

As far back as 1994, an executive search firm told the Financial Review “”I don’t think there’s any doubt that it’s harder to get enthusiasm for tobacco companies. There is a trend. If you have ten qualified candidates and you tell them it’s a tobacco company, five might say they don’t want the job.”  Sixteen years later it looks as if the odds may have lengthened considerably.

This week, the Canadian Medical Association Journal (CMAJ) published a devastating article about the destruction of key documents by British American Tobacco’s (BAT) Canadian subsidiary, Imperial Tobacco Canada (ITC).

In it, the authors claim that BAT instructed ITC to destroy key documents that could expose the company to liability or embarrassment. ITC, rather stupidly in my view, wrote to BAT listing 60 of these documents, confirming their destruction. Using this list, these 60 documents were subsequently found in BAT’s own document archives.

The documents included evidence from internal scientific reviews, as well as 47 original research studies, 35 of which examined the cancer-causing effects of smoking. The documents also describe BAT research on light and mild cigarettes, including the ways in which consumers adapted their smoking behavior in order to get the same levels of nicotine as if they were smoking full-strength cigarettes. The documents also depict a comprehensive research program on the pharmacology of nicotine and its addictiveness, showing the central role of nicotine in smoking behavior.

We should bear in mind that in 1992, when these documents were destroyed, tobacco companies were still denying that nicotine was addictive and that smoking caused cancer.

As we say in our seminars: Sometimes you need to ask yourself who your friends are.

Damian O’Hara is a former chain smoker who after countless miserable attempts to quit, finally did so successfully using Allen Carr’s Easyway method (Sterling/ 2006). The early part of his career was spent working at international advertising agencies but today he is the President of Allen Carr North America where he heads up the US and Canadian arm of a global organization dedicated to helping smokers quit. Over the past 25 years Allen Carr’s Easyway books and seminars have helped an estimated 10 million smokers quit successfully.

3,500 American Kids Begin Smoking Each Day–1K Will Smoke For Life

Nicotine Replacement Therapy: 94% Failure Rate

NYC: Smoking Costs $5,000 Gross Yearly

October 15, 2009 Tradingmarkets

Kigali — British American Tobacco, Rwanda (BAT) Friday awarded over Rwf 5 million to twelve needy students at the Kigali Independent University(ULK).

The Rwf 5,430,000 will cater for the students’ education needs, scholarships and internships. The company’s sub-Saharan Africa Area Regulatory Affairs Manager, Kabir Kaleechurn, underscored the role of the private sector in promoting community development.

He said BAT believes in adding value to the community in which it operates not only by being one of the major contributors in terms of taxes but also through helping the needy in Rwanda.

“By opening a door of opportunity to students and providing them with a platform for internships in private companies, the private sector allows them to bridge the theoretical skills acquired in school to the practical aspects of the ever changing business world,” Kaleechurn said.

ULK Rector, Alphonse Ngagi, expressed his gratitude to BAT for the support and called upon other private organizations to emulate the company.

According to BAT, this is part of the company’s partnership with the Ministry of Education.


Copyright © 2009 Allafrica

LONDON – British American Tobacco has recruited Richard Burrows, a former Bank of Ireland (BoI) chairman, to be its new chairman, The Sunday Times reported, without citing sources.

The newspaper said his appointment at the group, the world’s second-biggest cigarette maker, in succession to Jan du Plessis, was expected to be confirmed this week.

It said the appointment could be controversial due to Burrows’ prior role at BoI, which was badly hit during the financial crisis.

A spokeswoman for BAT declined to comment.

Du Plessis is stepping down after five years following his appointment as chairman of global miner Rio Tinto.

In July, BAT beat forecasts with a 25 percent rise in first-half earnings and predicted strong full-year growth.