A price war over cigarettes in Spain could hit Imperial Tobacco’s bottom line by up to £110m, the company warned yesterday.

The Lambert & Butler maker controls Spain’s number two brand of cigarettes by volume, Fortunas. Volumes in the country have fallen since a ban on smoking in public places was introduced in January.

The news comes after Imperial last month reported a 5% drop in UK operating profits for the first half of the year, down to £281m. Overall profits, however, were up 7% for the six months to 31 March to £1.27bn.

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Roll-your-own growth helps Imperial Tobacco lift profits (10 May 2011)