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The world's fourth-largest tobacco company is considering entering the United States, a move that could have a big impact on two large Triad companies. Imperial Tobacco Group plc, a British company, sees the United States as a potentially profitable market with less risk of lawsuits than there was three or four years ago. CEO Gareth Davis told news agency Bloomberg last week that he considered the U.S. an attractive market. Such a move would likely shake up the U.S. cigarette market, and could pose new challenges to Winston-Salem-based Reynolds American Inc. (NYSE: RAI) and Greensboro-based Lorillard Tobacco Co. (NYSE: CG). Imperial is considerably larger than either of those companies, earning revenues of about $21.5 billion in 2005, based on Monday's exchange rates. By comparison, Reynolds, the second-largest U.S. tobacco company, had total revenues of $8.3 billion in 2005 and Lorillard, the No. 3 cigarette company, had revenues of $3.6 billion. Philip Morris USA, the country's biggest cigarette maker, had sales of $18.1 billion in 2005, though that was just a fraction of its overall business, as its parent company, Altria Group, brought in another $45.3 billion in overseas cigarette sales and $34.4 billion from its food operations. Imperial's cigarette brands include West and Davidoff. It already does business in 130 countries.



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Before the Second World War many manufacturers gave away collectible cards, one in each packet of Duty free cigarettes. This practice was discontinued to save paper during the war and was never generally reintroduced. During the Second World War they gave out Duty-free cigarettes to the soldiers and citizens. On April 1, 1970 President Richard Nixon signed the Public Health Cigarette Smoking Act into law, banning Dutyfree cigarette advertisements on television in the United States starting on January 2, 1971. However some Duty free tobacco companies attempted to circumvent the ban by marketing new brands of Duty free cigarettes as "little cigars"; examples included Tijuana Smalls, which came out almost immediately after the ban took effect, and Backwoods Smokes, which reached the market in the winter of 1973-1974 and whose ads used the slogan, "How can anything that looks so wild taste so mild".

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