BAT Zimbabwe Reports 7% Drop in Cigarette Consumption as Economic Pressures Mount

British American Tobacco (BAT) Zimbabwe has reported a 7 percent decline in cigarette consumption, a drop the company links to weakened consumer spending power amid ongoing macroeconomic pressures.

Although official national consumption figures are not publicly available, industry projections indicate that demand could reach approximately 531.4 million cigarette sticks by 2030.

In a trading update covering the nine months to September 30, 2025, BAT Zimbabwe board chairperson Lovemore Manatsa said subdued disposable incomes and tightened consumer spending were beginning to significantly affect sales volumes.

According to the update, sales volumes fell 7 percent to 593 million sticks, leading to a 22 percent slump in cigarette revenue to US$21 million compared to the same period last year. The company attributed the decline to constrained consumer budgets, a difficult operating environment, and the transition from ZWG to US dollar pricing.

Despite weaker volumes and revenue, BAT recorded a strong recovery in profitability. Profit before tax climbed to US$11 million, reversing a US$3 million loss posted in the same period in 2024 — a 491 percent year-on-year rebound. This improved performance was mainly driven by lower foreign-exchange losses and reduced inflationary pressures.

Operating expenses also registered a notable reduction, dropping 66 percent to US$10 million. BAT said this reflected improved cost management, easing inflation, and a sharp fall in forex-related losses.

The company added that its efforts to strengthen distribution, deepen engagement with traders, and implement performance-driven trade programmes supported volume performance during the period. The broader operating environment was described as “dynamic but relatively stable,” supported by moderated inflation and a firmer exchange rate resulting from monetary policy measures.

However, Manatsa cautioned that several challenges remain, including tight liquidity conditions, expensive borrowing costs, and persistent power outages that continue to affect industrial output.

“Looking ahead, the Company remains focused on reinforcing the strength and sustainability of the business by driving volume recovery through increased focus on the value segment, improving product availability across all markets and channels, and enhancing operational efficiency by optimising supply-chain processes and reducing our cost to serve in order to protect profitability,” he said.