British American Tobacco Plc’s Nigerian units are facing a hefty fine of $110 million from the Federal Competition & Consumer Protection Commission (FCCPC) in Nigeria after the regulatory body found the tobacco giant guilty of violating competition laws.
According to Bloomberg, the penalty comes at the end of a rigorous three-year investigation into the company’s business practices, particularly concerning its treatment of retailers and rival brands.
According to an official statement from the FCCPC, British American Tobacco (BAT) was found to have engaged in unfair business practices by penalizing retailers who provided equal prominence to competing brands in stores. This anti-competitive behavior prompted the regulatory body to impose a substantial fine.
In response to the findings, BAT has agreed to pay the $110 million fine and has committed to allowing the FCCPC to monitor its activities for the next two years. This monitoring period aims to ensure that BAT implements appropriate behavioral and business practice modifications.
The tobacco giant’s stock has been under pressure throughout the year, with a nearly one-third loss in value. This decline was further exacerbated when BAT wrote down the value of its US cigarette brands by £25 billion ($32 billion). Additionally, in April of the same year, the company reached a $635 million settlement with US authorities to resolve investigations into sanctions violations related to selling products in North Korea. The settlement also addressed allegations of misleading banks about the source of those sales.
Shares of BAT remained relatively unchanged in London on Thursday morning following the announcement of the fine.
In response to the FCCPC’s decision, a spokesperson for British American Tobacco (Nigeria) Ltd. stated, “BAT Nigeria acknowledges the mentioned monitorship and awareness campaigns and has cooperated fully with the FCCPC’s appointed service providers.” The company had previously disclosed the investigation in its 2022 annual report.
Source: BNN Bloomberg