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Big tobacco adds $1.7b to govt coffers

NZ Newswire logoNZ Newswire 12/06/2017

Old cigarette butts left in ashtrays made of wood. © Getty Images Old cigarette butts left in ashtrays made of wood. The government received a total of $1.7 billion in duty on tobacco sales in 2016 from the big three producers, British American Tobacco, Imperial Tobacco and Philip Morris, which all lifted sales in New Zealand last year.

British American Tobacco Holdings (New Zealand), the biggest of the three, had sales of $1.4b in calendar 2016 and paid excise of $1.13b. Profit fell to $22 million from $344m a year earlier.

BAT NZ, whose cigarette brands include Benson & Hedges, Holiday, Pall Mall, Rothmans, Winfield, Pacific No 1 and Topaz and its loose-leaf tobacco brands include Park Drive and Port Royal, also paid a $41m dividend, down from $117m the previous year. .

"While smoking rates in NZ have declined, many smokers still choose to smoke our brands," a company spokeswoman said. "BAT NZ had a solid year in 2016 recording slight market share growth."

Philip Morris (New Zealand) recorded a 27 per cent gain in sales last year to $197m, while excise paid rose 17 per cent to $161m.

Its profit slipped to about $2.2m from $2.9m, partly reflecting increased administrative and marketing expenses. Its owners got $4.8m in dividends. Its brands are Marlboro, GT and Longbeach.

Imperial Tobacco New Zealand disclosed its results for the 12 months ended September 30 last month, which included $385m in duty. It has previously said tobacco products manufactured at its factory in Petone are also exported to Australia. Its brands include Horizon, JPS, Peter Stuyvesant, West and Drum.

Worldwide, BAT has focussed its efforts on developing alternative income streams on vaping products, so-called e-cigarettes.

The New Zealand Customs Service has been ramping up excise duties on tobacco, with a 10 per cent increase effective January 1.

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