British American Tobacco (Malaysia) said volume fell 17 per cent in the fourth quarter, following a substantial September hike in excise tax that drove consumers to low-cost illicit product.

“We are fortunate that growth in our contract manufacturing export volume has offset our domestic volume decline. However as foreseen, the cigarette excise increase has accelerated consumer down trading to cheap illegal alternatives with severe impact on already declining domestic volumes”, said BAT Malaysia Managing Director Stefano Clini. In full-year 2013, volume declined 6 per cent.
A study covering the period from October to December of last year shows use of illicit cigarette products in Malaysia has risen 4.5 per cent to 38.9 per cent of the market, BAT Malaysia said.