BTI Share Price JSE Heads Above R1,000 Despite British American Tobacco’s Revenue Slump
British American Tobacco reported a steep revenue decline in New Zealand as illicit tobacco trade continues to expand.
Quick overview
- British American Tobacco reported a nearly 29% revenue decline in New Zealand for 2025, largely due to the expanding illicit tobacco market.
- Illegal tobacco products accounted for over 27% of total consumption in 2024, significantly impacting legal sales and excise revenue.
- High cigarette taxes and changing consumer preferences towards vaping are driving more consumers to the black market.
- BAT is calling for stronger regulatory measures to combat illicit trade, warning that without intervention, the situation will worsen.
British American Tobacco reported a steep revenue decline in New Zealand as illicit tobacco trade continues to expand.
Revenue Decline Reflects Growing Illicit Market
British American Tobacco reported a sharp drop in financial performance for 2025, with revenue falling nearly 29% year over year to NZ$180.7 million. The decline highlights increasing pressure from the illicit tobacco market, which continues to erode legal sales.
Industry estimates suggest that illegal products accounted for more than 27% of total consumption in 2024, translating into significant losses in excise revenue and undermining regulated operators.
Market Pressures Intensify
The downturn was evident across several key metrics. Inventory levels declined, tax payments fell, and overall market activity weakened as consumers increasingly turned to cheaper, unregulated alternatives.
High cigarette taxes have been a major driver behind this shift, pushing price-sensitive consumers toward the black market. At the same time, broader structural changes—including declining smoking rates and rising adoption of vaping products—are reshaping demand.
Technical Picture Improves, But Hurdles Remain
While the rebound is encouraging, BAT still faces technical resistance ahead. The stock has rebounded, finding support several times at the 50-week moving average (yellow), an area that previously capped upside moves. Now the stock is headed toward R1,000. A sustained break above this level would likely restore confidence in the broader bullish trend.
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That would bring back the all time high of R1,045 in focus and further above that. Failure to clear that resistance, however, could leave shares range-bound as investors wait for clearer evidence that earnings have stabilized and regulatory pressures are easing.
Calls for Regulatory Action
BAT has urged authorities to implement stronger enforcement measures to combat illicit trade. Proposed steps include tighter retailer licensing and harsher penalties for illegal distribution.
The company argues that without intervention, the illicit market will continue to grow, further damaging both public finances and the legal tobacco industry.
Outlook Remains Challenging
Despite stable dividend payouts to its parent company, the overall outlook remains difficult. The combination of regulatory pressure, shifting consumer behavior, and expanding illicit trade presents ongoing challenges for BAT’s operations in New Zealand.
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