Changing The Cigarette Packaging In The UK And Its Challenge

Australia’s bold decision to regulate the cigarette packaging has stirred rumors of UK following suit. The British American Tobacco is already expressing its discontent and planned lawsuit once the UK government impose such regulations upon cigarette companies. Legal actions will be acted upon by the manufacturers of Lucky Strike and Dunhill cigarettes. The new cigarette packaging will be plain and is said to be launched next month.

These legal actions will be asking for compensations since the effectivity of such law may impact the business of either big or small cigarette manufacturers.

The UK parliament will be dissolving soon and matters regarding the plain cigarette packaging are expected to be brought into light this March. The votes will decide whether cigarette manufacturers and big companies get to keep their branding in the cigarette packaging or not. If passed, this new law will be effective as early as the month of May next year, 2016.

Legal actions are already being discussed by tobacco industry after it has lost its battle to Australia which is now the only country with rules for plain cigarette packaging. These rules will also be included in the future plans of Ireland.

There have been rumors after a full year sales report has been revealed by the second largest tobacco company in the world. The report shows how the fluctuations in the currency are responsible for the diminishing profit in the tobacco industry.

Adjusted profits are revealed to have fallen by 7.2% because of the weakening of the pound currency. If the currency rates continues to stay in this track, the tobacco industry is expecting a 10% effect in the profits for the while financial year due to currency.

Volume of cigarettes manufactured has also decreased by 1.4% because of the smoking rate which continues to decrease. In Western Europe, the decline is around 5.9%. The volume decrease is not felt in countries such as Ukraine, Turkey and Iran since smoking rate in the following continues to rise.

BAT is also keen on buying the 24.7% left in Souza Cruz, a Brazilian subsidiary. The conditions are favorable because the Brazilian real is now quite weak.