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Imperial Tobacco Gp (IMT)

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Friday 18 November, 2005

Imperial Tobacco Gp

Announcement re Singles

Imperial Tobacco Group PLC
18 November 2005

18 November 2005



Following the ruling by the European Court of Justice on 10 November 2005, the
German Ministry of Finance has announced that all Singles products will continue
to be taxed as fine cut tobacco until 31 March 2006. Singles produced after this
date will be taxed as cigarettes.

It remains extremely difficult to quantify the effect of the ruling on the
market due to the unpredictability of consumer reaction to the increase in
taxation. However, at this stage we estimate that the impact on German operating
profits, in the current financial year to 30 September 2006, could be around £20
million. Management's expectation for overall Group profits in the current
financial year remain in line with those at the time of our Preliminary Results
announcement on 1 November 2005 and, going forward, we intend to mitigate the
impact on our performance.

Gareth Davis, Chief Executive of Imperial Tobacco Group, said: 'We sell around 7
billion of the 22 billion Singles consumed each year in Germany. The strength of
our broad product portfolio leaves us well placed to capitalise on the
anticipated consumer migration to other tobacco products and low price

'We have informed the works councils, the unions and our employees in Germany of
the transition period and will be discussing the implications with them. We will
ensure they are the first to know of any decisions we make.'


The EU Commission referred the German government to the European Court of
Justice in late 2003 over the taxation of West Singles, which are currently
taxed as fine cut tobacco. At that time, West Singles was the major Singles
product available in the German market. The Commission sought to have Singles
taxed at the same rate as cigarettes. The case was heard in May 2005.

Singles (also known as modern make your own tobacco products) refers to
pre-rolled cartridges of tobacco, which are not able to be smoked when
purchased. The cartridges are inserted into cigarette paper tubes with filters,
using a special device resembling a pen. The tobacco cartridges and the paper
tubes with filters are sold separately.


Simon Evans         Group Media Relations Executive   Tel: +44 (0)117 933 7375
John Nelson-Smith   Investor Relations Manager        Tel: +44 (0)117 933 7032

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