Imperial Tobacco has revealed it faces a £110m hit to its profits due to price cutting in the Spanish cigarette market.
It said that price moves in Spain in recent weeks had impacted all tobacco companies there, and it had acted to protect its market position. It said it continued to monitor the situation closely. Its Altadis business has followed key rival Philip Morris in cutting prices after consumption in Spain fell after a ban on smoking in public places, which came into effect on January 1 this year. The moves will hit operating profits for this year by around £110m, including a one-off cost of £40m relating to the impact on its logistics business.
Imperial said that, excluding Spain, the company's financial performance would be in line with expectations. This has proved little comfort to investors, and the company's shares have dropped 27p to £20.58.
