Tobacco firm's sales up 16pc

$249 million in duties landed in government coffers, more than the dividend from its largest SOE. Photo / Thinstock
$249 million in duties landed in government coffers, more than the dividend from its largest SOE. Photo / Thinstock

Imperial Tobacco New Zealand, the local unit of the global group with brands including Drum, Horizon, JPS and Peter Stuyvesant, posted a 16 per cent increase in annual sales, generating about $249 million for the Government's coffers from duties.

Profit rose to $21.4 million in the year ended September 30, from $16.97 million a year earlier, according to the Wellington-based company's results posted with the Companies Office. Sales rose to $345 million from $297.8 million a year earlier.

Growth in sales of tobacco products in New Zealand meant Imperial Tobacco paid 19 per cent more in duty than it did a year earlier. Tobacco generates more funds for the Government than it gets in payments from its largest state-owned enterprise, Meridian Energy, which paid $163 million in ordinary dividends last year.

Duty is the biggest cost for tobacco companies, amounting to 72 per cent of Imperial Tobacco's revenue in its latest year. It also paid $9.3 million in tax.

Raw material costs to make its cigarettes and tobacco products rose 8.3 per cent to $26.2 million, the accounts show, and wages gained 7.8 per cent to $14.8 million.

According to the ASH website, New Zealand's tobacco market is dominated by three companies - British American Tobacco, the largest with brands including Benson & Hedges, Dunhill, Pall Mall and Rothmans; Imperial Tobacco, second in terms of profit; and Philip Morris, which makes Marlboro.

- BusinessDesk

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