Operating Review
UK
Our market leading position reflects the strength of our multi-product portfolio.
| Market Size1 | 2009 | 2008 |
|---|---|---|
| Cigarette (annualised) | 44.2bn | 45.2bn |
| Fine cut tobacco (annualised) | 4,100tn | 3,550tn |
| Performance Highlights1,2,3 | 2009 | 2008 |
|---|---|---|
| ||
| Cigarette volumes | 9.8bn | 10.8bn |
| Cigarette market share | 45.5% | 46.1% |
| Fine cut tobacco volumes | 1,200tn | 1,150tn |
| Fine cut tobacco market share | 58.7% | 62.2% |
Market Review
We estimate that the annualised duty paid cigarette market was down by 2 per cent to 44.2 billion (2008: 45.2 billion). In January, we increased prices across our portfolio.
The change in timing of the UK Budget from March to April has resulted in a partial shift in performance from the first to the second half of our 2009 financial year.
We estimate the annualised fine cut tobacco market grew by 15 per cent to 4,100 tonnes (2008: 3,550 tonnes). Both cigarette and fine cut tobacco benefited from a reduction in the purchases of UK brands abroad as the impact of a weaker economy and currency reduced overseas travel.
Our Performance
Our cigarette market share was 45.5 per cent (2008: 46.1 per cent) and has stabilised following the launch of our new value range JPS Silver in November 2008. The brand has made excellent progress, achieving a spot share of 1.8 per cent in March. Lambert & Butler and Richmond remain the UK’s two largest cigarette brands. In fine cut tobacco, our market share was 58.7 per cent (2008: 62.2 per cent) following declines in our premium brands. However, this was partially offset by the continuing good performance of Gold Leaf in the value segment, now up to 3.7 per cent (2008: 2.0 per cent). Encouragingly, our Golden Virginia brand has gained volume in recent months and we launched Golden Virginia Yellow in the growing value segment in March to further strengthen our position.
