Imperial expects tobacco ban ruling 'in days'

Click to follow
IMPERIAL TOBACCO, the group behind the Lambert & Butler and Golden Virginia brands, said it expects the Court of Appeal to rule within days on the introduction of a ban on tobacco advertising in the United Kingdom.

The Government lodged an appeal in October after the High Court ruled that it could not implement the ban before the European Court of Justice (ECJ) had ruled on the EU's right to implement the measure. The case was brought by Imperial and the other UK tobacco groups Gallaher, Rothmans UK and British American Tobacco.

The ban was to be introduced on 10 December. However, this is not thought to be a factor in determining the date when the Court of Appeal will give its decision. "I'm expecting a decision within days," said Gareth Davis, Imperial's chief executive.

Mr Davis said the prospect of the ban had forced Imperial to bring forward the launch of Richmond, a new UK cigarette brand that hit the market in September.

"From our point of view there is scope for a voluntary code [on cigarette advertising] but it is very difficult to have an ongoing dialogue with the Government. It won't talk to us."

Imperial said the effect of an advertising ban would be to freeze market share, while making it harder for newcomers to enter the market. It would also make it harder for companies to launch new brands. However, large companies such as Imperial and Gallaher would be less severely affected because they already have strong sales teams.

Mr Davis attacked the Government's higher cigarette duties, citing them as the chief cause of the decline of the legitimate UK cigarette market.

The ECJ is to give its verdict on the legality of the ban in the second half of next year, ahead of its proposed introduction in Europe on 1 July 2001.

Mr Davis's comments came as Imperial posted full-year pre-tax profits up by 23 per cent at pounds 325m. However, profits from UK operations fell slightly. The shares fell 3.5p to 664.5p.

Investment, page 22