Imperial’s Four Key Brands Account for 33% of Sales

Imperial Tobacco’s £1.2bn writing off of amounts of its Spanish business is a surprise. The manufacturer is the giant operator in the recession-hit country, where a half of the personnel is unemployed.
Volumes are declining and companies as Imperial have been raising prices in order to increase profitability. It has also been paying attention on its key brands such as Gauloises, Davidoff and West. These are higher margin products as well as Imperial’s rolling tobacco as Drum and Golden Virginia brands, which have been declining to. Whole sales of these fine cut tobaccos increased by 13%, with premium cigar sales up 10%.

The manufacturer has also been implementing innovation, as for instance its “Glide Tec” packages, which demonstrated positive results and great demand among many smokers. These packages have a little “window” on the front of the package which permits the smoker to slide up the inner package with their thumb, thus opening the pack with only one hand. In the year to September, net profit from tobacco increased 5% at constant currencies, with volumes of cigarettes sold dropped 2.5%. After the write-down, pre-tax revenues declined to £1.1bn from 2.2bn.