Imperial Tobacco UK Sales Success

Source from:  UKPA 11/03/2010

Imperial Tobacco has said it sold more cigarettes in the UK than a year ago as smokers looked for cheaper brands - bucking the trend worldwide. The world's fourth biggest cigarette maker said economic conditions and illicit trade impacted total volumes, which declined 2.9% to 345.5 billion in the year to September 30. This "white stick equivalent" figure takes into account an increase in fine cut tobacco sales. In the UK, the producer of Lambert & Butler cigarettes, Rizla roll-up papers and Drum fine-cut tobacco, saw a slight increase in cigarette volumes to 21.1 billion, up from 20.8 billion in the previous year. Bristol-based Imperial said UK consumers were turning to cheaper economy brands, which also led to a 13% increase in fine-cut tobacco volumes to 5,050 tonnes. Despite overall falling volumes, price increases saw Imperial turn in a 10% rise in pre-tax profits to £2.5 billion and a 3% rise in net revenues to £7.1 billion. Imperial, which sells products in 160 countries, said it had seen strong performances from its core brands, Davidoff, Gauloises Blondes and West, which make up 22% of overall cigarette volumes. Chief executive Alison Cooper said: "Price increases and a number of strong cigarette and fine cut performances more than offset the challenging environment in some markets." Ms Cooper said economic conditions have impacted consumer spending in Spain, the United States, Russia and Ukraine, where volumes all declined. But outside of the UK, Germany and Spain, the rest of the European Union saw an increase in cigarette volumes. Imperial also reported improved performances in Asia Pacific and Africa. Imperial said increases in duty and bans on product displays and vending machines would lead to an increase in the illicit trade in tobacco. The company, which operates from 51 manufacturing sites and employs 38,000 worldwide, recently signed an agreement with the European Commission to collectively tackle the problem of illicit trade in tobacco. Enditem