ZAGREB, Sept 29 (Hina) – British American Tobacco (BAT) has been the biggest foreign investor in Croatia in the past five years, shows a study by Oxford Economics on BAT’s influence on Croatia’s economy.
After investing almost HRK 4.2 billion in taking over the TDR tobacco company, over the past five years BAT has invested an additional HRK 490 million and continued to increase production, employment, and exports.
A total of HRK 4.7 billion in investments means that in the period between 2015 and 2019, BAT generated about 20% of the total foreign investments in Croatia, the analysis notes.
Oxford Economic notes that BAT has supported a series of domestic sectors, directly through its factories in Kanfanar and Virovitica and through its iNovine retail chain and also has indirect impact through its distribution network, buying up tobacco from farmers, transport, and in the financial and utilities sectors as well as other service sectors.
The analysis notes that BAT’s total contribution to Croatia’s GDP at the end of 2019 amounted to HRK 455 million which is a 52% greater increase than TDR had in 2015.
Of that, direct contributions in 2019 amounted to HRK 212 million and more than three-quarters of that amount was generated by the factory in Kanfanar.
A further HRK 158 million in contributions to GDP was generated through BAT’s supply chain, HRK 96 million of which relates to buying up tobacco from local farmers in Virovitica-Podravina and Pozega-Slavonia counties.
The remaining HRK 85 million is the result of consumption by BAT workers and suppliers.
Oxford Economics notes that in the past five years BAT increased the number of its employees by almost 800 people or 48% and in 2019 it had more than 2,400 jobs.
In 2019 18.8 billion equivalent cigarettes were produced in the Kanfanar factory, which is 125% more than in 2015. Almost 87% of its total production valued at HRK 1.2 billion was exported to other EU countries last year which is 214% more than in 2015, the study notes.
BAT also generates significant budget revenue. Excise taxes on locally produced cigarettes amounted to HRK 2.2 billion paid into the state budget in 2019.
That is 1.3% of all budget revenue and is almost HRK 500 million more than in 2015.
In addition to excise taxes BAT paid an additional HRK 171 million in other taxes, the analysis says.
Finance Minister Maric: Dialogue with TDR continuing
Finance Minister Zdravko Maric said last week that talks with TDR were continuing related to announcements by BAT that it was considering its withdrawal from Croatia.
After the government adopted its budget guidelines for the next three years reporters asked Maric what the negative risks to the budget could be apart from the Covid-19 epidemic and macroeconomic forecasts in the context of TDR’s future.
“With all due respect, every job is exceptionally important. However, TDR and the factory in Kanfanar and everything that is related to it and its suppliers are not that significant as far as effects to macroeconomic forecasts are concerned, for it to either be placed in negative or positive risks,” Maric said then.
(€1 = HRK 7.545637)