by Ed Chadwick
Retailers have told cigarette manufacturers they will have to pay increased margins if they want them to promote new brands after the display ban.
The call came as value brands shot to the top of bestsellers lists thanks to margins of up to 8%. Retailers told RN they were giving space to the likes of Carlton and Rothmans in favour of a glut of new lines being brought to market before 6 April.
Tony Mallaban of Premier Avon Gold in Keynsham, Bristol, said that Rothmans Superkings had become his second best-selling brand “overnight” thanks to 8% margins.
The British American Tobacco-owned brand is currently on promotion through Booker depots at 8% with packs pricemarked at £5.90.
Mr Mallaban said: “It’s double the margin of most other brands in percentage terms so we have given it multiple facings and it has become a big seller for us.
“It points towards what might happen in the dark market – we will only promote products if we are getting a good margin and that will be the only way to launch new products.”
Bal Ghuman of AK Convenience in Shrewsbury said he was selling huge volumes of Carlton cigarettes, also available with an 8% margin and pricemarked at £6.10.
I won’t slog my guts out to help a manufacturer promote a product for a 4% margin
“We are lucky to get 4% on some of the more established brands so of course we are going to get behind the likes of Carlton and Rothmans.
“We get paid a bigger margin in cash terms and we are doing big volumes because they are the cheapest on the market.
“I won’t slog my guts out to help a manufacturer promote a product for a 4% margin. After next April, we will be expecting significantly more than that on new products.”
These trends were backed up by data collected from independents’ EPoS systems by retail analysts EDFM, which showed sales of Rothmans growing from 3.9% to 4.9% in the four weeks to 30 August.
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