Imperial Tobacco gains on hopes of profit boost from new cigarette price rise
Von buycigarettes, 14:22Cigarette smokers already smarting from George Osborne's price increases in this year's budget have more pain to endure. Imperial Tobacco has begun a new round of price rises, adding 25p a packet with effect from 10 July. This comes on top of the 37p budget increase.
Analysts at Societe Generale said it was an unusually large rise from the company, a significant step-up from last September's 14p rise led by Japan Tobacco. Soc Gen said the move would add 4% inflation on an average retail price of 680p a pack, which could put off more smokers. UK cigarette market volumes since the budget have slipped by around 5% to 6%, and Soc Gen estimated this could worsen by another 1% or so.
But overall the move could boost Imperial's UK profits, analyst Chas Manso said, by around 5% and its group profit by 1%, if the new price increases stuck.
