British American Tobacco (BAT) Malaysia has urged its shareholders to speak up against the illicit trade in cigarettes, which has severely impacted the company’s financial performance in the country, reports the New Straits Times.
BAT Malaysia’s profit from operations declined 24.9 percent to MYR478 million ($111.8 million) for the financial year 2019.
According to BAT Malaysia Managing Director Jonathan Reed, continued growth of the black market has forced the company to aggressively manage its cost base.
“This is not sustainable in the long term,” said Reed at BAT Malaysia’s 59th annual general meeting on June 15. “To effectively stop the black market, more drastic and radical actions are required.”
For 2020, BAT Malaysia said its growth strategy would depend on the recovery of the legal tobacco market, a regulated nicotine landscape, sensible fiscal policies and a resolution to the affordability issues affecting consumers.
“We are ready to invest our resources to continue tackling this issue,” said Reed. “However, full recovery can only happen if we are able to work hand-in-hand with all relevant parties to implement effective structural reforms to manage the extraordinarily high levels of illegal trade.”