BAT could postpone investments because of guaranteed margin
British American Tobacco's Hungarian unit on Tuesday said a bill that would guarantee a minimum margin on retail tobacco sales could force it to postpone investments of about HUF 15 billion planned for 2013 and 2014. The guaranteed margin is expected to cause Hungary's tobacco market to contract, threatening the 400 workplaces at BAT's plant in Pécs (SW Hungary) as well as the almost 8,000 people who now rely on retail tobacco sales to make a living, BAT said. Hungary will introduce a state monopoly on retail tobacco sales from July 1. Concession winners have already been announced and a second tender called because of a lack of interest in licences for tobacco sales in Hungary's smallest communities. Parliament is set to vote on Tuesday on a guaranteed 10% margin for tobacco retailers. Industry insiders put the margin on retail tobacco sales at present at 3-4%.
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