Ban does not stop smokers

22 February, 2008

The year 2007 must go down as one of the most difficult in the history of tobacco sales. In July smoking was banned in enclosed public places. In October the smoking age was raised from 16 to 18 and, to top it all off, legislation came into force that required all lighters to have child-safety mechanisms.

At a glance the market seems to be bearing up - overall sales have climbed 2.3 per cent to £9.7 billion, and seven out of the top 10 brands are in growth.

Then again, 80 per cent of takings on cigarettes goes straight into the Treasury's pocket, according to Imperial Tobacco, so it could just be the enormous taxes on cigarettes buoying up the market.

The trade expects volumes to decline at around 4 per cent a year and early research in England and Wales has borne this out, according to Imperial.

A look at the top brands shows that value brands such as Lambert & Butler, Mayfair, Richmond and Royals are doing well and that the British public prefers king size cigarettes - Silk Cut is the only standard size brand in the top 10.

With advertising banned, companies are investing in new product development - such as rolling tobacco to cash in on the trend - research, and below-the-line marketing encouraging retailers to do more to promote drinking and entertaining at home.

2008 isn't going to be any easier for cigarette makers or tobacco retailers, with picture health warnings to be introduced on all packets from this autumn. But perhaps as the trend towards drinking at home continues, off-trade tobacco retailers will manage to weather the storm of anti-smoking legislation.

Star performer

Benson & Hedges King Size is the only pack in the top 10 to push into double-digit growth, with a 23.7 per cent sales increase. The "sub-premium sector" brand benefited from a new slide pack, which owner Gallaher says has boosted its popularity with young adults.

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