Imperial’s Gauloises and Davidoff Cigarette Brands Face Slight Decrease

Published on May 8th, 2012 00:00

Imperial Tobacco stated that its share of a decreasing UK market was demonstrating an improving trend as more and more smokers switch to its discount cigarette brands. The Bristol-based company, whose Lambert & Butler cigarette brand is the best-selling in UK market, showed a better performance since July as JPS Silver and Windsor Blue backed the growth of its cigarette market share by approximately 0.1% on December to 45%.

The tobacco giant is hoping that its Lambert & Butler brand will demonstrate further increase after it had recently introduced a smaller queen-sized cigarettes and an innovative filter that can be squashed up to release menthol. According to estimates, the privileged revenues increased 7.5% in the three months to the end of March, higher from a 1% decrease in the previous quarter, as it benefited from the great demand in developing markets, mostly in Asia Pacific.

Cigarettes Price increases backed overall profits for the half-year increase 3.2% to £3.4 billion, even though volumes dropped by 3.5% as the number of cigarette consumers fall in recession period. As about company’s rolling tobacco business, which is represented by such brands as Golden Virginia, JPS and Gold Leaf, have faced an increase in consumption in the second quarter as cigarette smokers switched to lower-cost roll-your-own cigarettes.

Imperial Tobacco estimates that volumes in the overall UK market dropped 1.5% in the period, affected by a number of tax increases, the latest of which was about 4.5% above inflation and was presented in the March budget. The company’s representative stated that more than 90% of the price of some packages is now tax. UK profits increased 11.9% to £469 million although this was overstated by weaker comparisons with 2011 results, which was hit by the price growth. Shares increased approximately 3% after the positive second quarter figures, with group revenue up 3% to £1.5 billion.

The top-selling cigarette brands as Gauloises and Davidoff have been affected in the first quarter by several sanctions in Syria, continuous decreases in Spain and destocking after the price increase in the United States. Current sales were also supported by the positive sales of cigars in developing markets as for instance China. Damian McNeela, a tobacco industry expert, said: “After a complicated first quarter, we forecast the second quarter momentum to proceed into the second half-year.”


By Kevin Lawson, Staff Writer. Copyright © 2012 All rights reserved.

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