10th Nov 2005 10:31
Imperial Tobacco Group PLC10 November 2005 EUROPEAN COURT OF JUSTICE RULING The European Court of Justice today published its ruling on the future taxationof West Singles stating that: "by applying the tax rate for fine-cut tobacco forself-rolled cigarettes to rolls of tobacco sold under the name 'West SinglePacks', the Federal Republic of Germany has failed to fulfil its obligationsunder Article 4(1)(b) of Council Directive 95/59/." The ruling also stated that: "the criteria for the application of Article 4(1)(b) of Directive 95/59 are met in this instance and that the products concerned,such as 'West Single Packs', must be classified in the category of cigarettes". Responding to the ruling, Gareth Davis, Chief Executive of Imperial TobaccoGroup, said: "We are disappointed but hope that the tax increase on Singles willbe phased in over a lengthy period of time in order to minimise the impact onthe market and jobs. "The timing and the structure of the tax increase are critical issues thatrequire careful consideration by the EU Commission and the German Governmentduring their discussions regarding the implementation process. "We continue to hold the view that although taxing Singles at the same rate ascigarettes is likely to encourage further cross-border trade, we expect manyvalue-seeking consumers to move to other fine cut tobacco products and low pricecigarettes. "We have prepared a variety of portfolio responses and remain confident that thestrength of our broad product portfolio leaves us well placed to capitalise onthis consumer migration." The European Court of Justice ruling will only determine the future taxation ofSingles. It will not affect the taxation of any other tobacco category. The EUCommission and the German Government will now negotiate the implementation ofthe ruling. 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 was seeking to haveSingles taxed at the same rate as cigarettes. The case was heard in May 2005.Advocate General Jacobs gave his opinion on 14 July 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 Alex Parsons Group Media Relations Manager +44 (0)7967 467 241 John Nelson-Smith Investor Relations Manager +44 (0)7919 391 866 Copies of our announcements are available on our website:www.imperial-tobacco.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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