In 2021, the multi-national conglomerate British American Tobacco (BAT) contributed 1.3 billion kuna (€173 million) to Croatia's GDP, generating as much as 0.4 percent of the country GDP, state news agency Hina said on Tuesday, citing a study by the Oxford Economics advisory firm hired by BAT.

Since taking over the largest local tobacco factory Tvornica Duhana Rovinj (TDR), BAT “has been continuously investing, increasing production, exports and employment in Croatia, and in the second half of last year, it launched a new investment cycle worth more than 600 million kuna in the production and distribution of new categories of products, thus placing Croatia firmly at the centre of the global transformation of the BAT group,” it was said at the presentation of the study.

Hina did not say when did BAT take over TDR.

The total value of BAT’s investments in Croatia reached almost 5.3 billion kuna in 2021.

Oxford Economics noted that new investments in technologically advanced products will further increase BAT’s economic contribution to Croatia’s GDP, on top of the 1.3 billion kuna, and the first effects are expected to generate an additional 40 million kuna to GDP per year.

The general director of BAT’s Adria region Zvonko Kolobara said that BAT in Croatia has a “unique value chain,” which consists of agricultural production in Slavonia and Podravina, the production of tobacco and heated tobacco products in the factory in Kanfanar, the second largest national chain of kiosks and newspapers, a logistics hub for new product categories in Rijeka and a sales office in Zagreb, from which they manage eight markets in the Adria region.

BAT supports 6,071 jobs through its direct and indirect operations in Croatia, in industry, agriculture, logistics and transport, as well as the financial, utility and other service sectors. BAT had 1,491 employees at the end of 2021, and 700 jobs are supported solely by selling BAT’s products through independent retailers, 2,680 jobs are supported in domestic supply chains, including 370 tobacco producers in Slavonia and Podravina, while 1,200 jobs are supported as a result of spending by BAT employees, a retail segment supported by BAT and relevant supply chains.

“The total value of BAT procurement from Croatian suppliers in 2021 amounted to 644 million kuna, it was said,” Hina said.

BAT’s business is important for the Croatian economy also in the context of a strong influence on exports, given that around 80 percent of the Kanfanar factory’s production is exported to the EU market, while new categories of products are exported from the Rijeka hub to Europe and beyond.

As for BAT’s contribution to the state budget, it amounted to 3.5 billion kuna in 2021, which is the equivalent of 2.1 percent of total tax revenues. Most of that, namely 3.2 billion kuna, refers to excise duties and VAT. Economic activity and employment supported by BAT and its suppliers contributed 308 million kuna to the state budget, while the remaining 22 million kuna refers to VAT paid by retailers of BAT products, the Oxford Economics study showed.

(€1 = 7.52 kuna)