• BAT Kenya plans to source at least 70% of tobacco leaves locally in 2026, up from 60% in 2025.
• Local sourcing could save the company roughly £2 ($2.68) per kilogram of tobacco.
• Illicit cigarette trade now represents 45% of the domestic market, pressuring revenues.

British American Tobacco (BAT), the historical market leader in Kenya, will increase its local tobacco purchases to reduce production costs this year, Philemon Kipkemoi, BAT Kenya’s Chief Financial Officer, told Business Daily on March 10.

BAT Kenya aims to source at least 70% of its tobacco leaves domestically in 2026, rising from 60% in 2025 and 55% in 2024. Kipkemoi said, “A significant portion of our raw material consists of tobacco leaves. For each kilogram purchased locally, we save about £2 [$2.68].”

The strategy comes as BAT faces persistent pressure from cross-border smuggling, particularly from Uganda, which has affected domestic sales. The company reported a 12.5% year-on-year revenue decline to 35.9 billion shillings ($277.8 million) for the fiscal year ending December 31, 2025. Its filing noted, “Domestic market performance continues to be negatively affected by illicit trade. Illicit cigarettes now represent 45% of the domestic market, up from 37% in 2024.”

Boosting Kenya’s Tobacco Sector

Increasing local sourcing also supports the domestic tobacco sector and farmers’ incomes. By expanding domestic purchases, BAT Kenya creates new opportunities for local producers.

FAO data show Kenya’s tobacco leaf production rose from 10,533 tonnes in 2020 to 12,446 tonnes in 2024, an 18.16% increase over five years. Despite this growth, Kenya’s output remains modest in East Africa compared with Malawi, Tanzania, and Mozambique, each harvesting over 100,000 tonnes annually.

Stéphanas Assocle

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