Tobacco companies to launch cut-price cigarettes
Tobacco companies are targeting financially vulnerable consumers with the launch of cheap cigarettes. The move by Imperial Tobacco and Gallaher comes in the wake of a government consultation that could restrict the promotional activity of tobacco giants.
Imperial Tobacco, which makes brands such as Lambert & Butler, will launch a new brand called JPS Silver next month at a price of £4.21 for a pack of 20.
Meanwhile, Gallaher, which makes Benson & Hedges and Silk Cut, will reduce prices on its budget brand Sterling by 7% to £4.20 a pack.
Lobby group, Action on Smoking and Health research manager, Amanda Sandford, has slammed the move by the tobacco companies. “Whenever the price of cigarettes falls, there is an impact on consumption – that hits poor people the hardest. This is bad news,” she says.
The budget cigarette category has seen growth in recent years, with the sector accounting for 10.5%, or £1bn, of sales last year, compared with 6% in 2005. Cigarette companies say the growth is due to the economic downturn, where rises in fuel and food costs have encouraged adult smokers to “down trade”.
The budget cigarette sector – defined as cigarettes priced at £4.60 or below – is expected to account for 12.5% of the market by the end of 2008.
The Government is considering plans to force tobacco companies to sell cigarettes in unbranded packets. This would see the removal of any logos, colours and graphics on packs. The Department of Health is considering the plans as one of the many measures to reduce the number of smokers.