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Imperial on track but fears fall in cigarette and cigar sales

Britons continues to stub out the cigarette habit with tobacco group Imperial fearing that the recession will hit its cigar market and government plans for further controls will hit cigarette sales.
Ahead of its annual meeting today (3 February), Imperial nevertheless confirmed that its overall performance and financial position remained in line with expectations.
Chief executive Gareth Davis said: "In the first quarter of 2009 we maintained our growth momentum with further cigarette share gains in a number of our mature European markets as well as in many of our emerging markets in Eastern Europe, Africa and the Middle East."
He went on: "While we will not be immune from the current economic situation, we will be resilient, irrespective of there being some impact on our cigar and non-tobacco logistics businesses."
In a trading update, Imperial said the annual UK cigarette market declined by 4 per cent to 45 billion. It estimated that following the introduction of public smoking bans in 2007, the first quarter of 2009 saw the market revert to an annual decline rate of 2-3 per cent.
The company said it strongly opposed government plans to add further controls on the sale of tobacco from vending machines and the removal of tobacco displays in businesses, saying they “would be anti-competitive and further fuel illicit trade".
In Germany and France volumes declined by 2 per cent, in Spain they grew by 1 per cent, and in The Netherlands they remained stable. US market volumes are estimated to have declined by 4 per cent and proposals to raise taxes on large cigars is expected to lead to a fall in US cigar market volumes.

Source: Works Management