LONDON (Brand Republic) 鈥 Around £1bn has been wiped off the value of the top three UK tobacco companies as shares took a sharp nose-dive following the Government鈥檚 announcement that it hopes to ban all cigarette advertising and promotion through new legislation.
Labour ministers said The Tobacco Advertising and Promotions bill will place a ban on all advertising and promotion of tobacco products.
The bill will be introduced in the UK, after a European court ruled in October that European Union-wide legislation was illegal, and it is thought the government鈥檚 hopes to get it in place before the next general election will be helped along by its backing from the Tories.
Imperial Tobacco, which makes the John Player Special and Drum brands, was the hardest hit, with shares falling by 38p to 704p. Second was British American Tobacco whose shares fell 25p to 477p. Gallaher, which owns the Hamlet cigar and Silk Cut cigarette brands, fell 15p to 423p. Combined, their market value plummeted by almost £860m.
The ban will include Formula 1 racing. Three years ago, Prime Minister Tony Blair exempted Formula 1 motor racing from a ban. It was then revealed that Formula 1 boss Bernie Eccleston had donated £1m to the Labour Party. The money was handed back.
Public health representatives have praised the Government for its action, claiming it listened to public concern rather than the 鈥減ersistent bleatings鈥 of tobacco manufacturers.