Globrands reported today (Sunday) on agreements regarding entering into an updated agreement with the tobacco concern British American Tobacco for a period of 5 years starting from January 2023, i.e. until the end of 2027.
Glovebrands Group distributes the leading brands of two of the three largest tobacco companies in the world. In accordance with the agreements, and as soon as these are consolidated into a formal agreement, the import and distribution agreements with BAT and JTI will be valid until 2027 (BAT until the end of 2027 and JTI until January 2027).
Each of the suppliers has discretion in determining the sale prices of the smoking products for the company. In its financial statements for the first half of the year, the company wrote that “based on past experience, for the most part, the increase in the selling prices of the suppliers to the company is reflected in the selling price of the company to its customers, and in its estimation, this does not have a material effect on the demand for the smoking products sold by it.” In the case of an increase in the sales prices of the suppliers to the company, Globrands does not expect this to have a material adverse effect on its financial results in light of the fact that the increase is usually passed on to smokers.
“The extension of the agreement will give the company business stability that allows continued investment and development for years to come in accordance with our business strategy,” said CEO Gadi Netzer. “Our fruitful partnership with BAT and JTI is based on great trust and many years of joint work. We will continue to develop the Globrands group for the benefit of the employees, customers, suppliers and shareholders.”