P – POLITICAL ENVIRONMENT
Imperial Tobacco Group UK PLC is a leading Manufacturer and Supplier of tobacco products in the UK. (KEY NOTE 2012). In recent years, the group have faced an increasing number of significant challenges due to changes in Government Legislation and also an increase in Anti -Smoking Campaigns, as the UK becomes more concerned with Public Health and smoking become more socially unacceptable.
The changes in Legislation have mostly derived from the growing concern of Public Health and also the extensive research into the causes of fatal diseases such as cancer and heart disease. As a result, the government introduced these changes in an attempt to reduce the amount of premature and preventable deaths in the UK. (KEY NOTE 2012)
The new legislations now in place include a Smoking Ban and most recently, the Display Ban. Imperial Tobacco has opposed the Display Ban and launched a Supreme Court challenge over the Scottish Government’s attempts. They believe that “there is no credible evidence that the display ban will cut tobacco consumption”. Ministers insist display bans are needed to protect future generations from the effects of smoking. (BBC NEWS 2012)
Another of the challenges faced by Imperial Tobacco are Excise Duty increases. Increasing levels of excise duty could encourage consumers in affected markets to switch from premium priced cigarettes to lower priced cigarettes and fine cut tobacco. Future increase in excise duty could result in substantial decline in the demand for the premium priced tobacco products and could have an impact on the Groups margin.
Imperial Tobacco have a very strong Financial Position, therefore they have effectively managed to overcome these challenges. (KEY NOTE 2012)
BBC NEWS., 2012. BBC news: imperial tobacco launches supreme court challenge to display ban [online]. London: BBC News. Available from http://www.bbc.co.uk/news/uk-scotland-20299304...