BAT sees tobacco volumes dragging this year

British American Tobacco, the maker of Lucky Strike and Kent cigarettes, is sticking to its forecast of high single-digit growth for 2002 despite tough economic conditions in several of its key markets.

Martin Broughton, the chairman, said yesterday volumes would fall by 2 to 3 per cent this year, as the group tackled the thorny issue of contraband cigarettes, but volume growth would return in 2003.

BAT, the world's second-biggest tobacco company, said it would look for acquisitions to help it grow its global market share of 15 per cent. It ruled itself out of bidding for Reemtsma, the German tobacco group up for auction, on competition grounds.

The group said its strategy to focus on higher quality market share was working. Its four global brands – Lucky Strike, Pall Mall, Kent and Dunhill – grew 10 per cent against 3 per cent for international brands.

Mr Broughton also played downhe was poised to succeed Lord Marshall of Knightsbridge as chairman of British Airways. "I'm not ready to go non-executive. I'm very happy here," he said.

The group reported a 36 per cent rise in pre-tax profit for the year to end-December, from £1.5bn to £2.1bn. Sales rose to £25.7bn from £24.8bn.