Smoking ban hits cigarette sales in UK

Published on Thursday 20 September 2007 00:11

EMBASSY maker Imperial Tobacco said cigarette sales had slipped as smokers curbed their habit following the UK-wide smoking ban.

The group, which makes the UK's two top-selling cigarette brands - Lambert & Butler and Richmond - improved its UK market share during the past year, but saw volumes decline following the introduction of the ban in Wales, Northern Ireland and England.

Imperial, which is in the process of acquiring Spanish rival Altadis, said it expected this impact to decline over time, reflecting similar trends in Ireland, where the ban has been in place for three years, and Scotland.

The company said its overall performance was in line with its expectations for the year to 30 September, with volumes and margins both higher, following strong performances from JPS, international brand West and premium brand Davidoff.

Market share continued to grow in Germany, despite a declining tobacco market, while profitability across western Europe improved after it hiked cigarette prices.

The company, which also produces Golden Virginia rolling tobacco, said it continued to look for opportunities to expand its geographic reach. During the last year it launched the Davidoff brand in several new markets.

In July, the group announced its proposed 11 billion acquisition of Gauloises and Fortuna cigarette group Altadis. It said it expected to receive approval from the Spanish regulator in the next few weeks, after which the offer will be open for approval from Altadis shareholders.