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

 

Water: Farming Leaders Pledge To Help Make Rivers Swimmable

In a first for the country, farming leaders have pledged to work together to help make New Zealand’s rivers swimmable for future generations. More>>

ALSO:

Unintended Consequences: Liquor Change For Grocery Stores On Tobacco Tax

Changes in the law made to enable grocery stores to continue holding liquor licences to sell alcohol despite increases in tobacco taxes will take effect on 15 September 2017. More>>

Back Again: Government Approves TPP11 Mandate

Trade Minister Todd McClay says New Zealand will be pushing for the minimal number of changes possible to the original TPP agreement, something that the remaining TPP11 countries have agreed on. More>>

ALSO:

By May 2018: Wider, Earlier Microbead Ban

The sale and manufacture of wash-off products containing plastic microbeads will be banned in New Zealand earlier than previously expected, Associate Environment Minister Scott Simpson announced today. More>>

ALSO:

Snail-ier Mail: NZ Post To Ditch FastPost

New Zealand Post customers will see a change to how they can send priority mail from 1 January 2018. The FastPost service will no longer be available from this date. More>>

ALSO:

Property Institute: English Backs Of Debt To Income Plan

Property Institute of New Zealand Chief Executive Ashley Church is applauding today’s decision, by Prime Minister Bill English, to take Debt-to-income ratios off the table as a tool available to the Reserve Bank. More>>

ALSO: