Johnson Progress

British American Tobacco (BAT) Zimbabwe has reported a seven percent decline in cigarette consumption, a trend the company attributes to Zimbabweans’ dwindling disposable incomes amid ongoing economic pressures.

According to BAT’s trading update for the nine months to September 30, 2025, the company sold 593 million sticks, a seven percent drop from the same period last year.

“Tightening consumer spending is beginning to dent sales,” said BAT chairperson Lovemore Manatsa, attributing the decline to a tough economic environment and a shift in pricing strategy from ZWG to United States dollars.

Revenue fell to 21 million United States dollars, a significant drop from last year’s sales.

Despite the challenges, BAT recorded a sharp rebound in profitability, with profit before tax rising to 11 million United States dollars, up from a three million United States dollar loss last year.

“This turnaround is attributed to reduced foreign exchange losses and lower inflationary pressure,” said Manatsa.

Operating costs dropped to 10 million United States dollars, a sixty six percent fall from last year, driven by easing inflation, lower forex losses, and cost management measures.

The company said improved distribution efficiency, stronger engagements with traders, and performance-driven trade programmes helped stabilise volumes.

BAT described the operating environment as dynamic but relatively stable, supported by steady inflation and a firmer exchange rate.

However, the company acknowledged persistent headwinds, including liquidity shortages, high borrowing costs, and power outages, which continue to affect productivity.

“These challenges remain a major concern across the manufacturing sector,” said industry analysts.

Despite the challenges, BAT remains focused on reinforcing the strength and sustainability of the business through volume recovery, better product availability in all markets, and stronger operational efficiency.

“Looking ahead, the company remains focused on reinforcing the strength and sustainability of the business through volume recovery, better product availability in all markets, and stronger operational efficiency,” said Manatsa, outlining the company’s strategy to navigate the tough economic landscape.

As Zimbabweans continue to feel the pinch of economic pressures, BAT’s struggles highlight the broader challenges facing the country’s manufacturing sector.

With cigarette consumption expected to reach 531 million sticks by 2030, the company faces an uphill battle to recover sales and maintain profitability in a challenging market.