[Intl-tobacco] Altadis buys remainder of Moroccan tobacco monopoly

[robert weissman]

The Moroccan State extends the monopoly granted to R=E9gie des Tabacs for
three years
Altadis news release

Altadis will increase its interest in RTM from 80% to 100%

Paris-Madrid, August 1st, 2006

The Moroccan State has approved a decree law published on July 31 that
extends the
monopoly on the import and wholesale of tobacco products until December
31, 2010.
The monopoly was granted to R=E9gie des Tabacs du Maroc (RTM), which is
80%-owned by
Altadis since 2003.

The decree law modifies law 46-02, which has governed the tobacco
industry since
April 2003. This law initially called for the elimination of the
monopoly on the
import and wholesale of tobacco products on December 31, 2007. Today's
decree law
provides for a three-year extension.

The reason for this extension lies in the irreversible shift in demand
from dark to
blond cigarettes, which has affected local tobacco farmers. Most produce
dark
tobacco and will have to switch to blond.

In light of its experience in this area, RTM will provide technical
support to
Moroccan tobacco farmers until December 31, 2010 under the terms of the
decree law,
with the goal of deploying a plan to develop a variety of blond tobaccos.

To avert the risk of a price war, the decree law also includes a system
to regulate
the selling prices of tobacco products in Morocco.

Sale of remaining 20% interest to Altadis

The decree law's approval triggers the sale of the Moroccan government's 20=
%
interest in RTM to Altadis. The transaction, already planned for in June
2003, when
Altadis acquired 80% of RTM as part of the State-led privatization
process, amounts
to 4.020 billion dirham (370 million euros).

Enhanced position in Morocco

The extension of RTMs' monopoly significantly enhances Altadis' position
in Morocco.
  In 2005, RTM's economic sales rose to Eur237 million, while EBITDA
increased to
Eur129.4 million.

Altadis' unit sales in Morocco totaled 11.7 billion, in a total market
of 13.4
billion units.

RTM has widened its market share since it was acquired by Altadis, from
85% in 2003
to 88% in 2005, thanks to improvements brought to its local Marquise
brand and the
successful introduction of the Group's international brands (Fortuna and
Gauloises
Blondes), which have performed very well. RTM currently leads the
steadily growing
blond cigarette market.

At the same time, RTM's logistics business has benefited from the
strategy of
diversification into general logistics implemented in 2004. The business
is growing
at a good pace, with successful forays into new activities such as phone
cards. Some
22 million phone cards were distributed in 2005, representing an 85%
increase in
value from the year before. RTM has also initiated a vast loyalty and
upgrading
program for sales outlets. Ultimately, 2,000 have committed to this program=
.

With these developments, RTM is well positioned to pursue its growth and
improve
performance in the years ahead.

http://www.altadis.com/en/press/news/news.php?id=3D579&volver=3D../../conte=
nido.php?