Imperial sales go up in smoke

If you think business has been tough for you in the last few months, spare a thought for those in the cigarette business. The combined effect of the English smoking ban plus the miserable summer weather put a big dent in Imperial Tobacco’s UK sales, the cigarette maker admitted today.

Last Updated: 06 Nov 2012

Last financial year was a game of two halves for Imperial, which enjoyed a strong start to the period but saw sales slump after the smoking ban was introduced on July 1 – particularly since smokers were unwilling to loiter outside pubs in the rain. This led to a 2% fall in volumes for the year as a whole.

And the outlook is no better – Imperial thinks the initial impact of the ban will even out, but it’s still expecting the UK market to shrink by about 3 or 4% per year from now on.

Of course, most people are unlikely to shed any tears for big cigarette companies, which tend to be on a par with arms dealers and human traffickers in the popularity stakes.

This is particularly true when they make up for the shortfall in the developed world by flogging more cigarettes to emerging markets. Imperial, which has expanded its horizons beyond the UK to become the world’s fourth biggest tobacco company, saw increased growth in Eastern Europe, Africa and Asia last year. That took its total revenues to £3.3bn, a 4% increase, with operating profit up 8% to £1.4bn. It is also on track to complete its £11bn takeover of Spanish rival Altadis in January (a rare example of a UK company getting its hands on a European rival, rather than vice versa).

So it’s still making plenty of money, and is likely to continue doing so. As chief executive Gareth Davis said today: ‘Tobacco is an extremely resilient sector and it always withstands the bad times very well’.

That’s the major benefit of your customers being chemically addicted to your products, presumably.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

How to use workplace conflict to your advantage

But beware the festering feud.

Efficient chickens, less stuff, more optimism: The real way to address climate change ...

What is dematerialisation, and why does it matter?

The 5 behaviours of charismatic leaders

How to become more inspirational (without having a personality transplant).

When should you step down as CEO?

Bob Iger's departure poses an unpopular question for bosses.

The death and resurrection of the premium customer

Top-end service is no longer at the discretion of the management.

What HS2 can teach you about project failure

And how you can prevent projects going astray.