18th Nov 2005 12:00
Imperial Tobacco Group PLC18 November 2005 18 November 2005 IMPERIAL TOBACCO GROUP PLC TRANSITION PERIOD FOR TAXATION OF SINGLES AS CIGARETTES Following the ruling by the European Court of Justice on 10 November 2005, theGerman Ministry of Finance has announced that all Singles products will continueto be taxed as fine cut tobacco until 31 March 2006. Singles produced after thisdate will be taxed as cigarettes. It remains extremely difficult to quantify the effect of the ruling on themarket due to the unpredictability of consumer reaction to the increase intaxation. However, at this stage we estimate that the impact on German operatingprofits, in the current financial year to 30 September 2006, could be around £20million. Management's expectation for overall Group profits in the currentfinancial year remain in line with those at the time of our Preliminary Resultsannouncement on 1 November 2005 and, going forward, we intend to mitigate theimpact on our performance. Gareth Davis, Chief Executive of Imperial Tobacco Group, said: "We sell around 7billion of the 22 billion Singles consumed each year in Germany. The strength ofour broad product portfolio leaves us well placed to capitalise on theanticipated consumer migration to other tobacco products and low pricecigarettes. "We have informed the works councils, the unions and our employees in Germany ofthe transition period and will be discussing the implications with them. We willensure they are the first to know of any decisions we make." NOTES TO EDITORS The EU Commission referred the German government to the European Court ofJustice in late 2003 over the taxation of West Singles, which are currentlytaxed as fine cut tobacco. At that time, West Singles was the major Singlesproduct available in the German market. The Commission sought to have Singlestaxed at the same rate as cigarettes. The case was heard in May 2005. Singles (also known as modern make your own tobacco products) refers topre-rolled cartridges of tobacco, which are not able to be smoked whenpurchased. The cartridges are inserted into cigarette paper tubes with filters,using a special device resembling a pen. The tobacco cartridges and the papertubes with filters are sold separately. ENQUIRIES Simon Evans Group Media Relations Executive Tel: +44 (0)117 933 7375John Nelson-Smith Investor Relations Manager Tel: +44 (0)117 933 7032 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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