Britain's FTSE lags continental peers as BAT sees sales drop

* FTSE 100 down 0.1 pct, lags euro zone indexes

* Consumer stocks weigh as BAT reports sales fall

* Croda, Playtech (LSE: PTEC.L - news) help mid-cap index rise

By Francesco Canepa

LONDON, Oct 22 (Reuters) - Britain's FTSE 100 lagged small gains in main euro zone equity indexes on Wednesday as a gloomy update from British American Tobacco (LSE: BATS.L - news) weighed on companies which sell consumer goods.

Shares (Berlin: DI6.BE - news) in BAT fell 4 percent by 0741 GMT as the tobacco firm reported a revenue drop in the first nine months of the year, citing a slow economic recovery in western Europe and adverse currency moves.

Imperial Tobacco (LSE: IMT.L - news) fell 1.1 percent, with other companies exposed to weaker consumer demand and currency fluctuations against the pound, such as Diageo (LSE: DGE.L - news) , also lower.

Companies which sell consumer staples knocked 14.6 points off the FTSE 100, which was down by 6.59 points, or 0.1 percent, at 6,365.74 points.

It lagged gains of between 0.2 percent and 0.6 percent for main euro zone indexes such as Germany's Dax, which benefitted from a Reuters report suggesting the European Central Bank was considering buying corporate bonds to revive the region's economy.

"The BAT update is having an effect on the entire defensive sector," Manoj Ladwa, head of trading at TJM Partners, said. "The FTSE has underperformed because of its composition and we expect this to continue."

MID CAPS OUTPERFORM

The mid-cap FTSE 250 index was up 0.5 percent, boosted by a bullish outlook update by gambling technology company Playtech and bid speculation surrounding specialty chemicals maker Croda International (Other OTC: COIHF - news) .

Shares in Croda rose 2.8 percent, adding to a 1.8 percent rise on Tuesday, which the Daily Mail and Daily Express attributed to talk of a 4 billion pound (6.45 billion US dollar) offer for the firm.

Playtech rose 4.7 percent after saying it was confident it would exceed current market expectations after a strong start to its fourth quarter, which followed a 29 percent rise in revenue in the preceding period.

On the downside, Britain's biggest household goods retailer Home Retail Group fell 2.9 percent after announcing plans to close a quarter of its Homebase home improvement stores by 2018 as it prioritises the development of its main Argos chain.

SuperGroup (Other OTC: SEPGY - news) , the British company behind the Superdry fashion brand, fell 3.5 percent after it named former Co-operative Group boss Euan Sutherland as its new chief executive, replacing its founder Julian Dunkerton. (Reporting By Francesco Canepa; Editing by Andrew Heavens)