BAT Hellas targets top market share after reversing decline

Before Pavlos Kavvadias’s arrival at British American Tobacco (BAT) Hellas as chairman and managing director two years ago, the company’s market share kept falling for six consecutive years. Last year, sales of cigarettes rose 3.41 percent, of pipe tobacco 9.39 percent and of hand-rolling tobacco 43.7 percent. «The strong presence of the group’s trademarks, despite Greek consumers’ traditional ties with local tobacco industries, contributed to this satisfactory development,» says 37-year-old, Manchester-educated Kavvadias. BAT Hellas absorbed Rothmans Distribution Company in 1999, as a result of the merger of their two parent companies. In 2002, it posted net pretax profit growth of 67 percent to 3 million euros on a turnover rise of 12.2 percent to 508.9 million euros. Operating and marketing costs fell from 25 to 23 percent of turnover in 2001. Today, the company has the second largest market share in Greece with 16.1 percent, employing 150 people whose average age is 36 years. Its roster of brand names includes Peter Stuyvesant, Lucky Strike, Rothmans, Dunhill, Pall Mall, Kent, Cortina, Lord, Vogue, HB, Kim and Cartier. «Our goal is to capture first place. The Greek tobacco market now has 12 players and the question is how many will stand, given the falling trend in both foreign and Greek brands,» said Kavvadias. BAT’s merger with Rothmans found him in Cyprus: «Cyprus may be small in area but is a very big school in the field of management. Let me only note that of a total production of 5 billion cigarettes, 4 billion were exported,» he says. With severe restrictions on advertising, tobacco companies are naturally anxious to reverse the flagging fortunes of their image worldwide. «In 2002, we participated and jointly organized events related, on one hand, to the scientific specialization and qualitative upgrading of the tobacco branch in Greece, and, on the other, to cultural activities,» says Kavvadias. Last November, BAT Hellas sponsored a conference on the state of the Greek tobacco industry in Greece and the implications for the economy, agriculture and society. Kavvadias is a father of three. «We do not want adolescents to smoke, so our products are addressed only to adults.»