Smoking ban hits cigarette sales

IMPERIAL TOBACCO, the owner of John Player & Sons, said its cigarette sales in Ireland have fallen by 10% this year because of the smoking ban.

The company, which has a 25% share of the Irish market, said it sold 200 million fewer cigarettes because the ban on smoking in bars and restaurants.

The decline is even bigger than some had anticipated earlier in the year.

In September, Gallaher Group, which accounts for one in every two cigarette sold in the country, said its volumes had declined by 7.5% and would sell 260m fewer this year.

Tobacco companies are experiencing a difficult time in Ireland. Last week the Irish Examiner reported that profits at PJ Carroll fell by more than €20 million to €6.4m in 2003.

However, if Imperial’s drop was to be replicated across the industry it would mean some 700 million fewer cigarettes sold in 2004 this year.

Imperial said in statement yesterday: “while volumes in Ireland have declined it is too early to assess the impact of the smoking ban, due to the high excise increases in December 2003.

“A full year’s experience of the ban will be required in order to give an accurate assessment.”

The sales fall will have a knock-on effect for the tax take.

When the smoking ban was introduced, the Department of Finance forecast that the smoking ban would only reduce its take by €70 million.

But based on the new figures, it would lose more than €100 million of the €1 billion it receives every year in excise duties.

Imperial did not say how much profit it has lost through the smoking ban.

Imperial said it earned €465 million in the 12 months to the end of August from its western European business, which includes Ireland.

“In Ireland, our cigarette share has been holding up well at 24.8%, excluding brands distributed for third parties.

“Growth in Superkings has supported a stable JP Blue brand family, despite a decline in overall market volumes.”

It added that the number of legal cases taken by smokers had fallen by 307 in 1997 to 29.