Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Christine Farkas of Merrill Lynch.
Christine Farkas - Merrill Lynch
Thank you very much. Good morning Hermann.
Hermann Waldemer
Good morning, Christine.
Christine Farkas - Merrill Lynch
I am looking at the EU I respect your comments about no global trade down but looking at Marlboro share across France, Germany, Italy and of course Poland some share erosion as well as some sequential slow down in some key markets. Given the importance of the EU on your profits can you talk a little bit about what you are seeing sequentially and given the strong innovation portfolio behind Marlboro why perhaps Marlboro is not holding better than what we saw in the quarter?
Hermann Waldemer
Well first of all I would say that if you look at the shares for the EU region then you clearly can see that Marlboro is stabilizing let's not forget that Marlboro over the past couple of years was under pressure by price repositioning of premium brands to mid price brands that went to the low end. That is behind us we still have some slight share erosion in Germany. It is still down 0.6 France is down into quarter-on-quarter comparison but flat actually if you compare it to Q4 of 2008.
Spain down 0.5, Poland down 0.04, so these are much lower rates than what you have seen and actually when you go to the innovation pipeline. Well not just enter the beginning of rolling that out. You have the Marlboro relaunch, repackaging of Marlboro Gold its now in the markets in Germany, Austria, Poland, France, Italy.
So this is just starting Marlboro advanced had milligram product under the Gold umbrella the role out actually is only starting with France now later this month for the beginning of May. So many of the initiatives that we have done have just started there is much more to come. And this is what gives me the confidence that this is going to strengthen the Marlboro franchise going forward. When it comes to the total EU market then you have to see that there was one really very special item in there. Which was the trade or the retail inventory reduction in Spain which was driven by working capital requirements of tobacconist these are all small entrepreneurs. Which have brought their stocks little bit down but not to the point where we would risk any other stocks there, so that had an impact on the market and therefore on the volumes this quarter.
- To read the full transcript on Seeking Alpha, click here »
