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Monday, November 30, 1998 Published at 10:52 GMT


Business: The Company File

Overseas sales light up tobacco group's profits

Tobacco smuggling has reached new heights

Imperial Tobacco, which makes Lambert & Butler cigarettes and Golden Virginia Tobacco, has announced a 6% rise in profits to £325m, despite a decline in the UK cigarette market.

The group's profit advance was helped by strong growth in cigarette sales around the world, especially in Asia and Africa.


[ image: Imperial Tobacco is selling more cigarettes in Asia and Africa]
Imperial Tobacco is selling more cigarettes in Asia and Africa
Internationally, operating profit leapt 48% to £117m. Overseas business now accounts for a quarter of the group's operating profit.

Imperial Tobacco also managed to increase UK profits, even though the group says that that high taxes are encouraging huge amounts of smuggling and bootlegging of products from abroad.

UK sales falling

Official UK cigarette consumption is continuing to fall, but Imperial Tobacco claims that the market is actually static or increasing when imports from continental Europe are taken into account.

Another rise in tobacco excise duty, which will lead to an increase of 21p on a pack of 20 cigarettes, comes into force on Tuesday.

Imperial Tobacco's chief executive Gareth Davies said a pack of 20 cigarettes will now cost at least £1.50 more in the UK than in continental Europe.

Mr Davies said the group has successfully integrated Rizla, giving it "the world's leading position in cigarette papers".

"The recent acquisition of the Douwe Egberts Van Nelle tobacco business... has further extended our international presence and provided the group with world leadership in the roll-your-own tobacco market," he added.



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