Imperial Tobacco Predicts Strong Performance for 2010
Published on February 15, 2010 8:41 AM
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Imperial Tobacco Group stated last week it experienced a pleasant beginning to the year of 2010 in spite of difficult economic situation on the company’s major markets and criticized plans of UK officials to prohibit colorful cigarette packaging and logos, restricting it to plain black-and-white packs.
The fourth-biggest tobacco company across the globe by sale volumes revealed in its 1Q sales report that its performance and revenues in the fiscal year to the present day coincide with anticipated figures.
The manufacturer of Davidoff, Richmond, R1, Gitanes Blondes, West (number one cigarette in Germany), Lambert & Butler (top-seller in UK), and other tobacco products cigarettes admitted it had hiked prices of many brands in Spain, Germany, the U.K. and France, earlier in 2010. Price rises are typical feature for current mature markets, where sales are either keep declining or at best are equal.
However, Imperial Tobacco may have a hard time in its U.K. market as local officials are eager to reduce smoking rated by 50 percent by the next decade. In addition, UK government already agreed to prohibit cigarette vending machines, impose heftier penalties for underage sales and id considering an initiative to ban logos and colors from cigarette packs. Gareth Davis, Imperial’s Chief Executive Officer declared last week they have been against the proposal to limit cigarette packaging to plain one, since there is no reliable data that adolescents take up cigarettes or adult people keep lighting up because of colorful cigarette pack designs.
“Requiring all tobacco items to be selling in identical plain packs will contribute to significant rise in tobacco contraband and reverse the government’s intentions to augment the funding of anti-smuggling efforts.
Imperial Tobacco has found itself under a strong pressure from Japan Tobacco, major rival of Imperial on UK tobacco market, which reported in the fourth quarter of 2009 it had initiated a campaign to boost its presence on the market and outstrip Imperial to become the leading tobacconist in UK.
Imperial spokesperson declared last week that its overall market share on UK market dropped 0.1 point in the 4Q, to 45.2% down from 45.3% reported in September 2009. The company hiked per-pack prices of its flagship UK brands by 27 pence, after am identical rise by Japan Tobacco.
In Germany, Imperial’s second-biggest market, the company lost 0.2 percent share, recording 27.1% down from 27.3%. In Spain, the company experienced its largest drop, as aggregate cigarette sales went down by 10%, whereas rolling tobacco went to a record-high 30% growth. Last month, Imperial raised the price on the greater part of its products across Spain by 15 cents a pack.
As regards the U.S. market dramatic increase in federal excise taxes in April led to a 9% decline in cigarette sales. Cigarette sales remained strong in the company’s remaining European Union markets as well as in other regions, with further sale volumes growth experienced in Africa, Asia and the Middle East.
