Beyond the smoke screen it’s business as usual in Russia for British American Tobacco

A BAT statement strained to create the impression of change, but any specific action was lost in a fog of corporate-speak

If you are a member of the board of British American Tobacco, courting popularity was probably never a top personal priority. Even so, the people overseeing a large and widely-held FTSE 100 company might still feel obliged to explain why, amid the broad boycott of Russia by multinationals, they think it’s fine to carry on business in the country roughly as normal.

A statement attributed by BAT to “a spokesperson” strained to create the impression of change, but any specific action was lost in a fog of corporate-speak. Suspending an unspecified sum of capital expenditure, “rationalising” marketing activities and “scaling our business activities appropriate to the current situation” commits the company to very little. BAT’s bottom line is this: “Our business in Russia continues to operate”.

In other words, a large factory in St Petersburg will keep producing Lucky Strikes, Kents, Rothmans and Dunhills, and a head office in Moscow, plus 75 regional offices, will continue to distribute. BAT accounts for about a quarter of the cigarette market in Russia.

Naturally, BAT included a line about its “duty of care” to 2,500 local employees. But other large companies selling consumer inessentials have concluded that their equivalent duties are best fulfilled by suspending operations while continuing to pay the workers. What they want to avoid is paying tax revenues to Putin’s regime. And remember, in the tobacco industry, excise revenues also apply.

The FTSE 100’s other fag merchant, Imperial Brands, with 1,000 local employees, has opted for a clear suspension of activities. Unlike BAT, Imperial is halting production in its Russian factory and is stopping all sales and marketing. It is not messing about with “rationalising” and “scaling”.

One can only conclude that BAT (corporate slogan: “building a better tomorrow”) cares less about its contribution to Putin’s coffers. If Luc Jobin, BAT’s chairman, feels that interpretation is unfair, he is free to speak for himself.

Next Ofgem price hike could come earlier than October

You want more bad news about energy prices? Here’s a contender: Ofgem gave itself powers last month to hike the price cap before the next scheduled update in October. So, theoretically at least, the widely-predicted £3,000-ish could arrive early.

Ofgem called its new tool an “in-period adjustment”. The power to adjust the cap more frequently than every six months flowed from the perceived need to keep consumers’ bills and energy firms’ costs roughly in step when wholesale price are soaring or plunging violently.

Exceptional adjustments would be made only in exceptional circumstances, Ofgem advised, helpfully providing a checklist of five criteria. The trouble is, the first three would seem to have been met already. The latest explosion in gas prices has been caused by a “rare” event that is “external” to UK energy suppliers and was “not reasonably avoidable” by them. Ofgem would still have to consider if an adjustment is “appropriate” and “urgently” required, but the new powers could almost have been designed for today’s wild market.

The regulator has no current plans to do anything, it should be said, and can’t anyway before the new £1,977 cap comes into force at the start of next month. Thereafter, though, Jonathan Brearley, the regulator’s chief executive, has the technical authority to make himself the most unpopular man in the country. Such a move would not be career-enhancing, the chancellor may wish to mention.

German fund makes £595m offer for Stagecoach

National Express’s planned all-share takeover of bus and coach rival Stagecoach was announced last autumn – so long ago that shareholders dozing on the back seats may have assumed the deal had completed by now.

Well it hasn’t, and now looks unlikely to do so. German infrastructure fund DWS has turned up with a £595m offer for Stagecoach that is superior on three counts. First, it’s in cash, which is nice to have in current nervous markets. Second, it’s pitched at a 37% premium to where Stagecoach’s shares stood on Tuesday. Third, there are no competition concerns, the reason for the delays so far.

It’s slightly odd that DWS has waited months to move, but the working-from-home effect on the UK’s new national bus strategy probably took a while to assess. As for National Express, a company where nothing ever seems straightforward, it must surely know that attempting to sweeten its offer is a non-starter. The 25% rise in its own share price suggests its investors never much liked the Stagecoach adventure anyway.

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