Smoking ban hits Gallaher's Irish sales

Gallaher, which makes Silk Cut, Benson & Hedges and Mayfair cigarettes, has won market share in Eastern Europe during 2004 but has seen volumes drop nearly 10 per cent in Ireland, a year on from the smoking ban.

Gallaher, which makes Silk Cut, Benson & Hedges and Mayfair cigarettes, has won market share in Eastern Europe during 2004 but has seen volumes drop nearly 10 per cent in Ireland, a year on from the smoking ban.

The company said the total cigarette market declined by more than 11 per cent in Ireland after the smoking ban was introduced in public places in March last year.

But Nigel Northridge, its chief executive, said the ban had not persuaded Ireland's smokers to give up their habit. "People are not stopping smoking. It is just that people are smoking maybe one or two cigarettes less a day than they used to," he said.

He also shrugged off the impact of a smoking ban due to start in the UK in 2008 in restaurants and pubs that serve food. "People will still have a choice under this legislation," he said. The UK cigarette market fell by 2.5 per cent in 2004, but Gallaher maintained its market share, of about 38 per cent, by raising prices and cutting costs.

Its expansion into Eastern Europe and Central Asia, including Russia, Ukraine, Poland, the Czech Republic and Kazakhstan, helped it increase annual profits by6 per cent. Sales in Russia, Ukraine and Kazakhstan were up more than 10 per cent and profits for the region were up 32 per cent to £57m.