What does British American Tobacco say about sales volumes in Australia?

Thu, 19 Jun 2014  |  

The Australian's campaign to torture and misrepresent the data on the volume of tobacco consumed in Australia seems to have had a final nail in the coffin with news from British American Tobacco, no less, that sales volumes in Australia are falling.

In their annual report which covers the period up to 31 December 2013, the BAT report notes:

Profit was up strongly as a result of higher pricing and cost saving initiatives, partially offset by lower volume."

What was that?

BAT saying "lower volumes"?

Oh I see. The volume of tobacco sold by BAT was lower in 2013, a picture that dovtails perfectly with the data from the Australian Bureau of Statistics. Who would have thought that?

Certainly not The Australian writers Christian Kerr, Adam Creighton, Henry Ergas, Judith Sloan, Sinclair Davidson, Chris Merritt, The Editorial writer or the person who puts together the cheeky Cut and Paste column.

See BAT annual report, page 32:  



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Deflation, the RBA and the Budget: Me on Sky TV

Thu, 28 Apr 2016

The day after the shockingly low inflation result for the March quarter, I was on Sky TV discussing the implications of this for the RBA. 

Here is the link:  http://www.skynews.com.au/business/business/market/2016/04/28/-a-still-reeling-from-inflation-slump.html 


Change of view – my inflation and cash rate forecasts were wrong

Thu, 28 Apr 2016

It looks like I was wrong. The unforeseen collapse in inflation, a free-fall in business conditions and erratic consumer sentiment means that the RBA will not be hiking interest rates any time soon. It may even cut rates such was the extent of the disinflation impetus that came through in the March quarter CPI.

I don’t think the RBA will actually pull the trigger on a rate cut, but it looks like my long held view that the RBA would be hiking interest rates in the September and December quarters is redundant. With the weight of new news, I am changing my view.

Linked to my hawkish rates view, I was also very upbeat on the Aussie dollar late last year calling 0.77 by mid 2016. Having been pretty much spot on with that call, albeit it a little premature in terms of speed of the AUD appreciation, it is time to get prudent and look for a short term pull back after the wonderful Aussie dollar rally.

The good news for me is that the trades from late 2015/early 2016 have been highly profitable. With interest rate cuts continuously being priced into the November and December 2015, as well as the February, March and April to varying degrees, the fact that the RBA held rates steady meant a nice 5 to 15 basis point profit each and every month. I have closed out the remaining May to September positions at about break even given they were placed when more than one rate cut was priced in, which is similar to where the market is trading after the March quarter CPI.

I will look to re-enter a rates trade when the time is right, most importantly when the market pricing of RBA policy looks to be wrong.