First war, then decolonisation, creates turbulent times for British American Tobacco from the 1930s to the 1960s.
After the upheaval of the Second World War and the loss of its Chinese operations, the company goes on to lose several end markets. But worldwide sales continue to grow.
Second World War 1939 - 1945
The impact of the Second World War on British American Tobacco is no less profound than that of the First World War. European operations are severely disrupted. In the Far East, the company loses contact with companies occupied by the Japanese. In China, where the company’s cigarette sales exceed 55 billion in 1937, the Japanese invasion brings British American Tobacco sales to a halt for more than four years.
By 1942, profits that had remained static at £5.5 million right through the depression were down to £3 million. They stayed at that level until the war ended.
The post-war world
British American Tobacco faces difficult trading conditions around the world with inflation, the high price of leaf and the need to replace assets lost in the war all depressing profits.
By 1952, the year of British American Tobacco’s 50th anniversary, the environment in which the company operates begins to change. The turmoil created by war ultimately results in the loss of several end markets, including Egypt, Indonesia and China. But even with political instability in some regions, the company continues to succeed.
With new Chairman Duncan Oppenheim, 1953 signals a fresh start for the company. Oppenheim’s urbane manner and keen legal intelligence provide a beneficial steadiness during the next 13 years.
Between 1953 and 1955, British American Tobacco ranks third among British, French and German companies, measured by company profits. Global sales exceed 280 billion in 1960 with the company reporting record trading profits of more than £58 million.
In 1956, British American Tobacco obtains the overseas business of Benson & Hedges. With State Express, Benson & Hedges becomes one of the cornerstones of the Group’s predominance in the international brand market.
In the early 1960s, British American Tobacco begins to diversify into paper and pulp, cosmetics and the food industry. Stakes in Wiggins Teape and Mardon Packaging are among the company’s initial moves. In 1964, acquisitions include the UK’s Tonibell ice cream company and the Lenthéric fragrance house. Brown & Williamson and British American Tobacco companies in South Africa and Australia also begin to invest in the food industry.
In 1966, British American Tobacco acquires cigar manufacturer Henri Wintermans and company profits exceed £100m for the first time. It also gains a new Chairman, Denzil Clarke, who accelerates the pace of acquisition.