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A brief history of Imperial Tobacco

Imperial Tobacco dominated the British tobacco trade throughout the twentieth century.

Wills of Bristol employed about 1,000 workers by 1889. The business was best known for the Woodbine brand. Informed by their Congregationalist principles, the Wills family had, by 1895, introduced financing for a staff canteen, a convalescent home, a sanatorium, a resident nurse and doctor, paid holidays and a number of recreational clubs.

Imperial Tobacco was formed in 1901 by the combination of thirteen leading British tobacco companies. Wills controlled the combine with just over half of the equity, followed by Lambert & Butler of London, Mitchell of Glasgow and John Player of Nottingham.

It was a defensive merger following the acquisition of Ogden of Liverpool, one of Britain’s leading cigarette manufacturers, by the highly capitalised American Tobacco Company.

Salmon & Gluckstein, a retail tobacconist with 184 branches, was acquired in 1902, largely to prevent its acquisition by American Tobacco.

American Tobacco sold Ogden to Imperial in 1902, and both companies agreed to avoid its rivals’ domestic market. The global market was to be catered for by a new company called British American Tobacco, with a two third stake held by American Tobacco and one third held by Imperial.

Imperial Tobacco estimated it had “rather over 50 percent” of the British tobacco market by 1904.

The Wills Embassy brand was launched in 1914.

By 1920 Imperial Tobacco had 72.5 percent of the British tobacco market, including 91 percent of all cigarette sales.

The firms in the combine retained their own brands and salesmen, but pricing and accounting were organised centrally.

By the late 1920s Imperial Tobacco had seen its virtual monopoly on cigarettes corroded by the re-emergence of competitors such as Carreras, Gallaher and Godfrey Phillips.

John Player overtook Wills to become the largest single Imperial Tobacco subsidiary in the 1940s.

Imperial Tobacco held 78.8 percent of the British tobacco market in 1955.

Imperial held 66 percent of the British tobacco market in 1968, followed by Gallaher (Benson & Hedges) with 29 percent. Carreras (Rothmans, Dunhill) was third in the market with 7 percent share. Will’s Embassy was the highest selling cigarette brand.