Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Imperial Tobacco NZ lifts Australian sales

Imperial Tobacco’s NZ arm lifts export sales to Australia; Philip Morris NZ boosts revenue

By Suze Metherell

April 15 (BusinessDesk) – Imperial Tobacco New Zealand, the nation’s second largest cigarette company, boosted annual sales after expanding its Wellington factory to supply the Australian market and taking on a 10 percent excise tax hike.

Sales at the local arm of Imperial Tobacco, whose brands include Peter Jackson and Drum loose tobacco, rose 9.6 percent to $432 million in the year ended Sept. 30, according to the company’s annual report.
Profit fell 12 percent to $19.8 million.

Imperial has spent $50 million to increase capacity at its only New Zealand plant, which exports 80 percent of production to Australia. The company exported $75.6 million worth of cigarettes and tobacco, and paid $286 million worth of duty to the government last year. Sales to Australia helped offset weaker turnover in New Zealand, it said.

“Domestic market volume is down slightly, reflecting normal trends, whilst Imperial Tobacco New Zealand’s domestic volume has remained relatively flat,” Adam Cleave, the parent company’s intergovernmental relations manager told BusinessDesk. “Production at our Petone plant has increased largely in response to market demand in Australia.”

Imperial’s smaller rival, third-ranked Philip Morris (New Zealand), had a 13 percent sales gain to $83 million in calendar 2013. The annual report for the maker of Marlboro brand showed profit rose 20 percent to $1.2 million last year, after a 30 percent drop to $993,000 in 2012.

Early this month parent Philip Morris International said it would close its manufacturing plant in Australia, saying government regulations that reduce the ‘fire risk’ of cigarettes, required by Australian legislation had hurt exports. In 2013 the New Zealand arm of the company purchased $5.1 million worth of product from its Australian counterpart.

Philip Morris Asia is challenging Australia’s plain packaging legislation in the international Permanent Court of Arbitration, claiming it breaches a Hong Kong-Australia trade agreement, after having lost a bid to sue in the Australian High Court in 2012.

In New Zealand, the government has been increasing the tobacco excise by 10 percent each year since 2012, lifting the price consumers must pay as part of a policy to make New Zealand smoke-free by 2025. The increases are expected to lift the average price of a pack of 20 cigarettes to more than $20 by 2016.

New Zealand is looking to follow Australia in introducing plain packaging in a bid to reduce brand recognition and shrink the cigarette market. Australia has introduced non-identifiable tobacco products but is being sued by tobacco producing countries at the World Trade Organisation which say the new regulations are intellectual property infringement.

Tobacco companies have been vigorously opposed to the plain packaging movement, questioning the legality and effectiveness of removing the last mode of advertisement for their brands and arguing it has led to an increase in black market tobacco.

British American Tobacco Holdings (New Zealand), which sells the Winfield and Benson & Hedges brands and is the nation’s largest cigarette business, hasn’t yet published its 2013 annual report. In 2012, sales rose 8.3 percent to $1.1 billion while it recorded a 5 percent drop in profit after recognising a 40 percent increase in tax expenses.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Housing: Affordability Drops 14%, Driven By Auckland Prices

Housing affordability across New Zealand fell 14 percent in the year ending November 2014, with Auckland’s lack of affordability set to reach levels it hit during the height of the global financial crisis, according to the latest Massey University Home Affordability Report More>>

ALSO:

The Dry: Fonterra Drops Forecast Milk Volumes By 3.3 Percent

Fonterra Cooperative Group, the worlds largest dairy exporter, reduced its milk volume forecast for the 2014-2015 season by 3.3 per cent due to the impact of dry weather on production in recent weeks. More>>

ALSO:

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news