Tobacco.org

• Smugglers Prosper in Spain’s ‘Perfect Storm’ for Tobacco  

Spanish smokers, squeezed by higher taxes and a deepening recession, are increasingly relying on smugglers to feed their habit.

Illegal imports now account for 7 percent to 8 percent of Spanish cigarette sales, compared with almost nothing a year ago, according to the country’s tobacconists association. In southern provinces such as Cadiz, Seville and Malaga, the proportion is 20 percent.

“Smuggling and fake tobacco, which had been eradicated since 1993, came back strongly last year,” said Jaime Gil- Robles, corporate affairs director at Altadis, the Spanish unit of Imperial Tobacco Group Plc. (IMT)

Smuggling, encouraged by a December 2010 increase in tobacco taxes and a ban on smoking in public places, has eroded both government coffers and company revenues. Spain, which has the European Union’s highest jobless rate, collected 14 percent less tobacco taxes in 2011 than a forecast of 9.05 billion euros ($12 billion), excluding value-added tax, according to Altadis.

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Japanese smoke signals push up Imperial  

The maker of Gauloises and Davidoff cigarettes has long been mooted as a potential target to be taken out, with a combination of British American Tobacco and Japan Tobacco regarded as a possible suitor.

Nomura analysts had urged investors to hold their horses over a possible deal, suggesting in November that it might be at least a year before the cigarette maker receives an approach, given uncertainty over when the Japanese government will sell its stake in Japan Tobacco.

But yesterday, analysts suggested that the upcoming resolution of the government stake sale means that Imperial's prospects of being taken over are set to increasingly be a focus for the market.

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Interview: Lord Hanson's cigarette king is still smoking out the takeovers 

When the going gets tough, nip outside for a ciggie. It's the only way Gareth Davis knows to deal with the stresses and strains of corporate life.

He might have retired from his day job two years ago, but now the former chief executive of Imperial Tobacco has three chairmanships on the go. How will he cope if they all hit a crisis at the same time? "I'll pull hard on a fag, I suppose," he says, after a moment's thought. "Have a couple of pints and reflect on it."

It's a no-nonsense style that has endeared Davis to the City over a 40-year career. Even the trio of jobs - at a bookie, a builders' merchant and a cardboard-box maker - are suitably blokeish for someone who has just jetted back from an "all-inclusive piss-up in Morocco" for a pal's 60th birthday.

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Roll-ups boom as UK smokers cut back  

SMOKERS trading down to value cigarettes and rolling tobacco in the UK boosted the owner of the Gauloises, Ducados, Lambert & Butler and Davidoff tobacco brands.

Imperial Tobacco said underlying volumes fell 7% in the final quarter of 2011 as sales were hit by the impact of sanctions in Syria, further declines in Spain amid the economic gloom, and destocking following a price rise in the US.

But revenues were down just 1% as it benefited from price rises and the sale of more expensive products.

And in the UK it has seen strong demand for its value brands, including JPS and Windsor Blue, and a rise in demand for fine-cut tobacco as customers roll their own to save money.

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Legal bid to overturn cigarette display ban rejected  

Attempts by a major tobacco firm to challenge Scottish Government plans to ban the open display of cigarettes has been rejected.

Imperial Tobacco claimed the measures, including the banning of vending machines for the sale of cigarettes, went beyond the government's legislative powers.

Three appeal judges, including Scotland's most senior judge, the Lord President, Lord Hamilton, have rejected the legal action challenging the Tobacco and Primary Medical Serivces (Scotland) Act 2010. Legal bid to overturn cigarette display ban rejected

Lord Hamilton said: "Such display is conceived to encourage the purchase of such products.

"As the consumption, particularly by smoking, of such products is believed to be adverse to health, the section is designed to inhibit, without prohibiting, their purchase."

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• Appeal judges reject Imperial Tobacco's cigarette display bid 

Appeal judges have rejected a bid by a major tobacco firm to challenge Scottish government plans to ban the open display of cigarettes.

They turned down the challenge by Imperial Tobacco which claimed the measures were beyond the legislative competence of Holyrood.

Lord President, Lord Hamilton, sitting with Lord Reed and Lord Brodie, ruled on the matter.

The government measure had been delayed pending the court case outcome.

Public Health Minister Michael Matheson said he was "delighted" with the ruling, adding that the display ban would help, "prevent the children of today becoming tomorrow's smokers."

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Imperial’s Spanish losses continues  

A combination of anti-smoking regulation, higher taxes and a price war precipitated a double-digit fall in cigarette volumes in the key Spanish market during the first quarter for Imperial Tobacco.

The FTSE 100 company, which owns Davidoff and Gauloises brands, declined to specify the extent of the fall for the three months to 31 December but said it expected the rate of decline to slow during the remainder of the year.

It caps a miserable year for Imperial in Spain, its biggest single market by revenue after Germany and the UK, coming in the wake of a profit warning last June due to a price war with rivals BAT and Philip Morris.

In November Imperial reported its full year operating profit in Spain had fallen by more than a quarter to £200m.

Jonathan Fell at Deutsche Bank said he expected the losses to moderate.

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• Tobacco companies are biggest political spenders 

New figures have revealed the political spending of tobacco companies, the mining industry and clubs as they fought to reverse government policy in the past financial year.

The Australian Electoral Commission (AEC) has released financial disclosure returns that show the donations of more than $11,500 made to political parties and the political expenditure of donors.

Large tobacco companies spent about $14 million as they fought against the Federal Government's plain packaging laws.

British American Tobacco, Phillip Morris and Imperial Tobacco gave a total of $9 million to the Alliance of Australian Retailers, which led the campaign against the laws.

Imperial Tobacco also separately spent more than $4 million fighting the move with printed material and broadcast advertising and Philip Morris added to that with nearly $500,000.

The Coalition also received donations worth $184,000 from British American Tobacco and $79,000 from Philip Morris.

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Sanctions against Syria and economic woe in Spain take a toll on Imperial Tobacco sales 

Imperial Tobacco's sales have suffered a series of blows from international sanctions against Syria, economic gloom in Spain and destocking following price hikes in the U.S and Ukraine.

The firm saw underlying volumes of the products it sold fall 7 per cent in the final quarter of 2011, although revenues were down just 1 per cent as it benefited from price rises and the sale of more expensive products.

Imperial also reported strong growth in emerging markets where sales of luxury Cuban cigars rose 14 per cent, while its key strategic brands of Davidoff, Gauloises Blondes, West and JPS, have seen 10 per cent sales growth.

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UPDATE 1-Imperial Q1 reported sales dip 1 pct as Spain drags  

LONDON, Feb 1 (Reuters) - British group Imperial Tobacco, the world's fourth-biggest cigarette maker, said sales dipped 1 percent in the last quarter of 2011, hit by a tough Spanish market, Syrian sanctions and destocking in Ukraine and the United States.

Imperial (Berlin: IOD.BE - news) , whose cigarette brands include Davidoff, Gauloises, JPS and West, said on Wednesday that after stripping out the impact of those four markets underlying sales rose 3 percent in the October-December period, its first quarter.

The group said its cigarette equivalent volumes, including fine-cut loose tobacco, fell 7 percent, while the underlying picture saw volumes down 1 percent.

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Imperial Tobacco Revenue Falls ($$) 

Imperial Tobacco Group PLC Wednesday said its fiscal-year performance is on track, even as the world's fourth-largest tobacco group by sales posted a fall in first-quarter revenue and volumes.

The maker of Lambert & Butler, Gitanes Blondes and JPS cigarettes said tobacco revenue, excluding foreign exchange effects, fell 1% year-on-year in the three months to Dec. 31, while total volumes fell 7%.

In the same period last year, tobacco revenue excluding currency effects and income from its small Moroccan distribution business rose 5%, on a 1.2% rise in volume.

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Tobacco stocks prove hard habit to kick 

British American Tobacco and Imperial Tobacco have failed to beat the FTSE 100’s annual performance only four times since 1999. The total returns over the past decade are second only to mining, and with much lower volatility, meaning the tobacco makers’ reputation as defensive has been well earned.

Spending £1,000 on BAT or Imperial in that year would by now have returned £9,370 and £6,340 respectively, including gross dividends, compared with a £1,510 total return for the FTSE 100 as a whole.

But, recently, their defensive strength has shown signs of weakening. BAT and Imperial shares were sidelined during the FTSE 100’s rally from an 18-month low since October, and are both in negative territory for the year so far. “It appears that, like a smoker trying to kick the habit, investors attempt giving up on the sector each new year, perhaps trying to convince themselves that they are better off without it,” says JPMorgan Cazenove analyst Rae Maile. “Last year it was not long before the cold sweats set in, and the comforting presence of cigarettes in portfolios was sought again. This year may well prove little different.”

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• Tobacconist: 'Lobby group claims untrue'  

A Timaru tobacconist denies claims that a lobby group he belongs to is a front for the tobacco industry.

Blogger Keith Ng says Murray Gibson has links to Omeka Public Relations, whose managing director, Glenn Inwood, represented Imperial Tobacco.

Imperial Tobacco's sales and marketing director in New Zealand, Tony Meirs, told a Maori Affairs select committee in 2010 that the company was providing the Association of Community Retailers (ACR) with public relations resources through Omeka Public Relations.

Mr Gibson is a founding member and a spokesman for the ACR.

He says the group has not received financial assistance from Imperial Tobacco.

However, Mr Ng claims tobacco companies are using retailers like Mr Gibson to speak out on the issues that affect them. . . .

"Imperial became involved but no money was involved in our organisation.

"Our website was donated by a friend and if Imperial paid Glenn, that's his business."

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Tobacco Industry Vet Freudenthal Joins Imperial Tobacco Group 

Kevin Freudenthal has been named president and CEO for Commonwealth - Altadis Inc. and region director for the Americas at Imperial Tobacco Group (ITG). He succeeds Graham Bolt, who retired from the company at the end of December.

Freudenthal will take overall responsibility for Commonwealth - Altadis from Eric Workman, senior vice president of marketing, at the end of the month.

Freudenthal has 26 years of industry experience and has made a career out of leadership and innovation in marketing tobacco products, the company said, working with large teams, crafting business strategy and improving profitability.

Before joining ITG, he was vice president for category management for Altria Group, and before that, spent two decades in executive positions at U.S. Smokeless Tobacco Co., where he began his career as a territory representative.

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Fresh blow for OFT as tobacco giant sees £112m pricing fine overturned  

Imperial Tobacco was among the biggest risers on the stock market yesterday after a £112 million fine for alleged unlawful pricing was overturned.

The Office of Fair Trading (OFT) last year accused the cigarette maker – which owns brands including Embassy, John Player Special and Lambert & Butler – of restricting competition and imposed a £112.3m penalty.

But the Competition Appeal Tribunal (CAT) has reversed the decision and also ruled in favour of Asda, the Co-op, Morrisons and Shell in similar cases.

Tobacco retailers and manufacturers were fined a record £225m after the OFT’s allegations of unlawful pricing, insisting the agreements over price links between rival brands “restricted the ability of these retailers to determine their selling prices independently”.

The allegations were in relation to certain promotional arrangements between Imperial and multiple retailers between 2000 and 2003.

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