Imperial Tobacco said economy cigarettes now account for about 20 per cent of the total UK market as consumers continued to "downtrade" after the VAT increases in January.
The global tobacco giant, which holds over 45 per cent of the 44.2 billion-cigarettes-a-year UK market, also said more smokers are rolling their own to save money, with the UK's fine-cut tobacco market growing 18 per cent to 4,850 tons on an annualised basis.
Imperial said consumers were economising before the recession hit, driven by higher taxation, but this trend "picked up some pace" in the economic downturn. Globally, Imperial's cigarette volumes were down 3.7 per cent in the first half to the end of March, at 146.9 billion, hit by weakness in the market in the US, Spain and Russia. Total revenues rose 8 per cent to £13.4bn, while pre-tax profits came in at £974m, compared with a £184m loss a year ago. In the UK revenues rose 7 per cent to £448m in the half year.Reuse content