Tobacco firms losing ground to foreign brands

Domestic tobacco companies face a continued shrinking of market share, a KPMG consultancy firm research study on the industry shows. Foreign brands keep increasing their share and endanger employment in the tobacco processing industry. The industry employs a total of 6,250 permanent and 9,000 seasonal employees, triple the number of employees in Belgium, the EU country with the second-highest tobacco processing sector. The local tobacco industries’ margin for maneuvering will be further diminished by the anti-smoking campaign under way, which significantly reduces advertising. According to data from the first quarter of 2002, the brand with the biggest market share in Greece is Marlboro, produced by Philip Morris (23.6 percent). Following, in descending order, are Assos (Papastratos), with 11.6 percent; Peter Stuyvesant (BAT), 10.3 percent; Camel (JTI), 9.3 percent; Karelia (Karelias), 6.2 percent; and Silk Cut (Gallagher), 3.9 percent. As one expects from the above results, Papastratos is the most successful Greek company and among the few listed shares on the Athens Stock Exchange eagerly followed by domestic and foreign investors, even in these lean years for the stock market. Through the first three quarters of 2002, Papastratos’s sales were 306.3 million euros, a 7 percent rise from the same period the previous year. Operating profits rose 23 percent to 32.8 million euros. Gross profit margin improved to 21 percent, from 20 percent in 2001. Pretax profit rose 4.5 percent, to 29.46 million euros. On the other hand, Karelias’s share shows almost no volume on the stock market, since the stock is concentrated among Karelias’s family members. One wonders why an effort is not made to spread the shares around a little and make them more attractive to investors. Managing Director Andreas Karelias said that his company’s sales for the whole of 2002 rose 34 percent, to 86 million euros. Of these, 64 percent took place abroad; Karelias is active in 57 countries and exports rose 62.7 percent compared to 2001. Despite the good figures, the company suffered the blow when, on January 1, 2002, it lost the right to produce and distribute the Camel brand in Greece. One market segment where Karelias outsells Papastratos and is second only to Philip Morris is at duty-free shops. In addition, venerable company Keranis faces severe financial problems and has sold its distribution network in northern Greece to cooperative SEKAP.

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