With just days to go until the tobacco display ban comes into force in England, Imperial Tobacco has revealed tobacco sales have taken a hit in stores that have already covered up their cigarette kiosks.
Speaking at The Grocer’s Annual Lunch this week, Imperial Tobacco UK general manager Amal Pramanik said sales in stores already compliant with the ban, which will come into force next Friday for stores over 3,000 sq ft, were down by 3%.
A case study by Imperial on a Preston store that had installed tobacco screens had found the ban resulted in longer transaction times and increased shopper frustration, Pramanik said. “The customer’s first reaction was that the store had stopped selling tobacco,” he added.
He admitted he had been surprised by the hefty price hike chancellor George Osborne had imposed on tobacco in last week’s Budget. Duty on cigarettes rose 5% above inflation, pushing the price of a pack of 20 cigarettes up 37p to an average of £7.46.
The hike could not have come at a worse time given the recent rise in illicit trade, he said.
“Lambert & Butler has had a 30% price increase in the last two years alone,” he said. “And as prices increase, this affects inflow. Inflow has been coming down and the government has been working with industry to do this, but in the last quarter it is up again. So the big increase in the Budget was a big surprise for us. The cheapest product in the market is so expensive, people can’t afford it.”
Pramanik added that the trade could lose as much as £200m if the government’s proposals for plain packaging on tobacco came into force.
- Don’t forget to vote in this week’s poll on thegrocer.co.uk. What effect will the display ban have?