Imperial Tobacco sales boosted by price rises
The increase in cigarette prices was the reason for growth of the Imperial Tobacco’s full-year income. Price rises helped compensate dropped volumes because the fourth-largest cigarette company in the world was hit by recession in Spain and svere markets in Poland and Ukraine.
The British multinational tobacco company produces and markets more than 340 billion cigarettes each year. Imperial Tobacco is the owner of such famous brands as Davidoff, Gauloises and West. The tobacco company said on September 20 that its income would increase around 4% for its year to end-September when stripping out uncertainty of exchange rates.
Overall sale volumes dropped by nearly 3%.
Imperial Tobacco intends to oppose Europe’s crisis by suggesting economy-brand cigarettes, such as JPS and Lambert & Butler and roll-your-own products, and at the time the company will raise prices for richer consumers in Western Europe and the United States.
The cigarette group declared that whilst growth was especially steadfast in Eastern Europe, Africa and the Middle East and in its Asia Pacific region, volumes decreased by weakness in Poland, Spain and Ukraine, as well as by sanctions in Syria.
The tobacco company has experienced the decrease in sale volumes in Ukraine because of raised illicit trade in cigarettes on which no tax has been paid, while its business in Poland for hand-rolling tobacco was damaged because farmers sold more tobacco directly to consumers.
Spain it is the company’s third-largest market after Britain and Germany. There volumes have been falling because of recession and high unemployment, while United Nations sanctions since the middle of 2011 have stopped its trade to Syria.
Imperial Tobacco, which is as well the world’s largest producer of cigars, fine-cut tobacco and tobacco papers, said that its key strategic brands such as Davidoff and Gauloises were expected to see strong volume and income gains because they still showed a rising proportion of the company’s overall cigarette volumes.
Imperial Tobacco said that its operating performance and financial situation were along with its expectations as it gave a trading update towards the end of its financial year to September 30 and ahead of annual results set for Oct. 30.