BAT Acquires Reynolds & plans to exit PT market?

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A_Morley
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Re: BAT Acquires Reynolds & plans to exit PT market?

Post by A_Morley » Wed Mar 29, 2017 11:11 am

How much longer do we all have to acquire Dunhill tobacco while it's still on the market, do you think?
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Rusty
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Re: BAT Acquires Reynolds & plans to exit PT market?

Post by Rusty » Wed Mar 29, 2017 12:00 pm

A_Morley wrote:
Wed Mar 29, 2017 11:11 am
How much longer do we all have to acquire Dunhill tobacco while it's still on the market, do you think?
The dates depend very much on what we believe is the narrative that is operative. and we have insufficient info to know for sure.
We know that BAT sold most of their pipe tobacco brands (all but two, and we understand where the other one is) to STG back in early 2007, and from their own words, they saw themselves as exiting a market that is, at best, peripheral to their strategic plans. It's also reasonable to assume that the contract with STG to manufacture the Dunhill blends runs annually from fall to fall (this is likely something that can be verified) with perhaps a provision for a year notice if either intends to terminate the contract. We've only ever heard from STG on this latest story about BAT exiting the pipe tobacco biz for good. BAT has shared nothing so far. And realize that the Dunhill cigar biz is involved in this too and is likely the larger biz. That may be why we're told 12-18 mos back in the January press story.

So I think that the earliest that we see them end manufacturing is November 2017. But it may go as long as early summer 2018 depending upon whether BAT is really willing to sell or license the Dunhill Pipe tobacco TMs. In either case we may not know until the retailers spill the beans probably in January 2018, at the earliest and then the market drains for 3 mos. BTW January 2007 is exactly when we learned that BAT was pruning the tin line the last time. So this isn't without precedence. The longer time interval occurs if they're really still negotiating. We don't know. It would be a shared brand in this case if STG does succeed in getting them somehow. If this occurred there would be a biz press announcement so there is no hiding. In that case they go on indefinitely with some loss of product in the US due to the FDA, but not until later in the year. The Dunhill brand is a global big dog premium brand in BAT's strategic plans and biz. I question whether they're willing to share it or can. There are very likely constraints on what they can do with that brand because in fact it's already shared with Alfred Dunhill Ltd/ Richemont across different businesses. That may be why it didn't pass into STG's hands back in early 2007, ie it was never on the table.

In the latter case BAT would have permitted STG to go to the market with their story to stimulate sales for a year and that sort of story would arrive in January, after some internal pot boiling, as indeed it did. So plan for a January 2018 run on the stock, ie you'd be better off having acquired everything for your 2018 eBay sales by December 2017. That's my guess and it might be wrong too. If everything we understand about the deeming rule is correct then the Dunhill run will be dwarfed by the much larger run on stock starting in August / September 2018.
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Re: BAT Acquires Reynolds & plans to exit PT market?

Post by Fainn » Thu Jun 29, 2017 7:55 pm

Where are we at on this?
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Re: BAT Acquires Reynolds & plans to exit PT market?

Post by Rusty » Thu Jun 29, 2017 9:42 pm

BAT now owns Reynolds. They kept the Reynolds CEO on.

On the Dunhill OTP?
No announcement so BAT has not parted with the Dunhill OTP. They still appear set on discontinuing them.
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Cigar News: British American Tobacco to Discontinue Dunhill Cigars and Pipe Tobacco

https://www.youtube.com/watch?v=cHcunREYzNY
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Re: BAT Acquires Reynolds & plans to exit PT market?

Post by JohnnyMcPiperson » Fri Jun 30, 2017 10:52 am

As long as C&D is still in business I'll always have tobacco to smoke, I've gotten to the point, I like other tobaccos, but if they disappear I'll live. Course it helps that I still have more tobacco under the bed than I will likely ever smoke...


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