Altadis joins tobacco price war in Spain
Jun 20, 2005
MADRID, June 20 (Reuters) – Franco-Spanish tobacco group Altadis (ALT.MC: Quote, Profile, Research) (ALDS.PA: Quote, Profile, Research) will launch its first cheap brand in an attempt to put a brake on falling sales, a company spokesman said on Monday, confirming reports in financial newspapers.
Altadis will launch the new brand “Ducados rubio” at 1.35 euros ($1.64) a pack.
“The growth is in the cheap brands, that means packs at less than 1.60 euros, and we’re going to enter that market with Ducados rubio,” the Altadis spokesman said.
He said Altadis was responding to declining market share in Spain due to growing demand for cheap brands.
In the first quarter, Altadis saw its market share in cigarettes made from light virginia-style tobacco fall 2.4 percentage points to 26.4 percent.
Financial daily Expansion said Altadis was also answering moves by its biggest rival Philip Morris (MO.N: Quote, Profile, Research) , which has cut the price of two of its brands.
The paper added that Altadis has seen a double-digit drop in the sales of its major brands in the first four months of 2005 due to growing demand for cheap cigarettes.
New entrants in the market have adopted aggressively low pricing.
Altadis stock fell 0.4 percent to 34.82 euros in Madrid at 0826 GMT, compared with a 0.2 percent fall on Spain’s leading Ibex-35 index .
