British American Tobacco Company Berhad Case Study

Introduction
With over a 100 years of history, British American Tobacco (Malaysia) Berhad (BATMY) is the market share leader, as of 2013, in the tobacco industry in Malaysia. The firm also ranks amongst the top 25 companies on Bursa Malaysia Securities Berhad in terms of market capitalisation. British American Tobacco Malaysia was established on 3 November 1999 following the merger of Rothmans of Pall Mall (Malaysia) Berhad and Malaysian Tobacco Company Berhad, two long established and successful tobacco firms (British American Tobacco Malaysia 2014). BATMY is part of an international firm, The British American Tobacco Group, which operates all over the world. Main business activities of the firm include manufacture, importation, and sale of cigarettes in Malaysia.
The firm’s head office and factory are located in Virginia Park, Petaling Jaya. Besides that, the firm has 10 other branch offices throughout Malaysia, including East Malaysia states, Sabah and Sarawak. The branch offices are used to market and distribute the firm’s products easily in their respective locations. Total employees of BATMY include a significant amount of 988 employees.
It is clear that cigarettes can be physically harmful to the consumer and the people around them. Therefore, the type of economic good that BATMY manufactures is a demerit good. A demerit good can be defined as ‘a good which is considered unhealthy’ and are often subjected to additional taxes in order to reduce consumption