Iraq / Worldwide
Imperial Tobacco has released its half-year results and blamed political chaos under ISIS in Iraq for having an unexpected impact on sales of tobacco. The Bristol-based maker of Gauloises cigarettes, Golden Virginia tobacco and Rizla cigarette paper has said sales volumes are down 5% in the last half year, with 2% of that decline attributed to “the deteriorating political and security situation” in Iraq.
Imperial saw overall global cigarette volumes decline 5% in the first half of the year to the end of March, but the company’s most profitable brands – which include Davidoff and Gauloises Blondes – sold 12% more. Underlying profits, stripping out currency movements, increased by 5%.
Imperial Tobacco also warned that a new levy on cigarette makers will be passed straight on to customers, if the Labour Party wins the general election, since Ed Miliband has pledged to hit tobacco companies with a windfall levy to pay for a guaranteed cancer test within seven days for every NHS patient.
Tobacco companies argue that high levels of taxation in the UK are forcing people to buy black market cigarettes, smuggled in by criminal gangs. They are also preparing a legal challenge to the coalition government’s plans to introduce plain packaging for cigarette brands.