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Last Updated: Aug 21st, 2007 - 13:23:54 |
Cigarette sales drop nearly 7%
Aug 21, 2007, 13:21
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Cigarette sales dropped nearly 7% last month after a smoking ban was introduced in England. Smokers bought 6.9% fewer cigarettes in the four weeks to July 28 than in the same period last year, Citigroup said, citing figures from consumer research group AC Nielsen. Sales were down 1.2% in June, ahead of the ban. Anti-smoking campaigners ASH welcomed the news. "This is a good sign," a spokeswoman said. "As expected, smokers appear to be cutting back on the number of cigarettes they smoke. We also expect many will use the smoking ban as a trigger to help them quit altogether." The fall in July mirrors the 6-8% declines in cigarette consumption seen after smoking bans in public places were imposed in Ireland in 2004 and in Scotland last spring. Citigroup analyst Adam Spielman said: "Over time the impact [on the tobacco industry] ameliorated, such that the full-year impact was in the low single digits." In addition, the wet weather in July is likely to have deterred smokers from using the outdoor smoking facilities at pubs and restaurants. Tobacco giants British American Tobacco (BAT), Gallaher and Imperial Tobacco have set up a website for smokers to help them find pubs with good outdoor smoking facilities such as awnings and beer gardens. Gallaher, which was recently bought by Japan Tobacco, saw a 6.6% drop in cigarette sales in July while Imperial suffered a 6.9% drop. Gallaher and Imperial dominate the UK market while Marlboro maker Philip Morris, which saw sales drop 10.1%, and BAT, where sales were down 8.3%, have small market shares. Imperial, makers of the Lambert & Butler, Richmond, and Davidoff brands, holds the view that smoking bans usually lead to an initial dip in smoking, but believes that consumption will rise again gradually over time. The tobacco group is also counting on buoyant consumption in emerging markets to make up for the shortfall in western countries. Imperial shares were down 11p at 2127p this morning. Borders, the book chain, has seen sales of books helping people to quit smoking soar by 260%. Early evidence shows that 97% of businesses have enforced the smoking ban in England. A survey of local authorities commissioned by the Department of Health found that in London, 99% of businesses were compliant within the first two weeks of the ban coming into effect on July 1. The south-west had the lowest rate of compliance, but even there 94% of businesses were upholding the law. During the first two weeks, just 45 written warnings were issued to smokers and only one fixed penalty notice was issued.
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