Imperial Tobacco secures American breakthrough

Imperial Tobacco, the maker of Davidoff cigarettes, secured a major new market today after winning approval to introduce its European brands to the United States.

The breakthrough came after the UK-based company joined the Master Settlement Agreement, which was formed between four tobacco companies and 46 states in 1998, restricts advertising and is a requirement to selling tobacco in the US, the industry’s most profitable market.

Imperial, which also makes Embassy, Lambert & Butler and Richmond, plans to start selling its products in America once a formal brand registration process is completed in the coming weeks. The approval came from the National Association of Attorneys General.

Chief executive Gareth Davis said: “This is excellent news and we are looking forward to further enhancing our presence in this highly profitable market.”

Imperial has had a presence in the US market since April, when it acquired Commonwealth Brands, makers of USA Gold and Sonoma cigarettes, for $1.9bn (€1.28bn).

Commonwealth, the fourth largest cigarette producer in the US, currently holds a 3.7% share of the market and a 13.4% share of the discount sector, against American competitors Altria and Reynolds American.

Imperial also holds around 1% of the US market for fine tobacco, used by smokers to roll their own cigarettes, and has an established business producing rolling papers and filter tubes in the US.

The firm has also grown through acquisitions, with its €15bn deal for Spanish cigarette group Altadis due to be completed by January.

Altadis, the maker of Gauloises and Fortuna cigarettes as well as Cuban cigars such as Montecristo, will consolidate Imperial’s position as the world’s fourth largest tobacco company behind rivals Philip Morris, British American Tobacco and Japan Tobacco.

Imperial demerged from Hanson in 1996 and listed on the London stock market as a FTSE 100 company. Its products are sold in more than 130 countries worldwide. It employs around 14,500 staff and operates 32 manufacturing sites around the world.