Imperial Tobacco acquisition delayed

Imperial Tobacco, Britain’s biggest cigarette manufacturer, said yesterday that its £8.8 billion acquisition of Spanish firm, Altadis, will not be finalised until January 2008. The group had anticipated completing the deal by the end of this year.

Imperial’s chief executive, Gareth Davis, said the deal had taken longer than originally anticipated due to the changes in Spanish takeover rules in August.

In spite of the delay, the group posted a strong set of full-year results with pre-tax profits of £1.237 billion for the 12 months to 30 September compared with £1.17 billion in 2006. Net sales were 4% higher at £3.3 billion.

The smoking ban in England, which came into effect on July 1, was partly responsible for a 2% decline in cigarette volumes in the UK. Mr Davis insisted this was as much to do with poor summer weather which prevented smokers from venturing outside.

The chief executive said the impact of the smoking bans in England and Wales was as expected, although the initial impact in England was bigger than anticipated.

In addition, the group has warned that putting photos of cancer victims on cigarette packets will not put off smokers. The graphic warnings, one of which is a picture a dead man on a mortuary table, will appear on UK cigarette packets from September 2008.

However Mr Davis said they would not change the behaviour of smokers. He added that we’ve seen many other jurisdictions, including Australia, Belgium, Brazil, Canada and Singapore and there is no evidence to suggest that these graphic pictures have led to a lessening in smoking. They seem to have more of an effect on non-smokers rather than smokers.

In Belgium, where they have just done it, it has had no impact. All they do is vilify and stigmatise smokers.

Mr Davis concluded by saying that smokers are well aware of the risks, these pictures are patronising, honestly.

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