PROFITS ON TOBACCO

New Zealand Times, Volume L, Issue 11497, 18 April 1923, Page 6

PROFITS ON TOBACCO

THE IMPERIAL COMPANY. The sha'reholders of ' the Imperial Tobacco Company met recently at Bristol ‘to divide among themselves profits amounting to £7,194,556. The dividend ■on the ordinary shares for, the year is 22J per cent., free of income tax. The dividend is really much larger than this, because a great number of the shared which bear it were giyen .as bonuses in 1916 and 1918. The public is very inter ;stid in Ih>s meeting and is expecting some reduction in._tbe price of tobacco, writes a correspondent of the\ “Manchester Guardian.” It is quite true that the tax. on tobacco amounts tb 6jd an ounce, but the tax does not account for the. whole of the war-time increase in price, The last time prices were put up the excuse given was that the rate of exchange with America—whence comes most of our leaf supplies—was heavily against us. The rate of exchange is now, and has been for some time, more favourable, but still there is no reduction in the prices of tobacco and cigarettes. • Hitherto the policy of the “Imperial” has been to turn a deaf ear to all criticism about high prices and to all appeals for relief. While it jnay he tine that they cannot reduce prices of certain “popular” brands of cigarettes, there is good ground for saying that the oost of production of numerous packet tobaccos has fallen to such an extent that the retail price could .quite properly be reduced 'by 3d an ouncs. There is this much, however, to be said of the Imperial Tobacco Company. Unlike the majority of trusts ana combines, it takes good care of the retailers. A nest-egg of £879,000 was distributed in the year 192L22 by way of bonus among the shopkeepers, and there is no reason to suppose that the distribution will be smaller on the present occasion. Retailers are, therefore, well satiated with what is going on. During the last 12 months there has been a Tall of over six million pounds in the quantity of tobacco cleared from bond for home consumption, and the figures of “value” show that the public has turned from the use of good-class tobacco to the cheaper kinds. This change has taken jjlaoe from necessity, not from choice, yet the profits of the “Imperial" have been increased in the year ■by roughly a million sterling. Thus, the Board of Trade returns and the'raimpany’s balance-sheet together give good reasons why there should now be a material reduction in the prices of tobacco.