Stockpiling in Europe boosted what Amcor called a “particularly strong” half-year performance for its tobacco business, but the packager said volume should decline in the first six months of 2016.

“Volumes in Europe were significantly higher as customers increased inventories during the half year. In Russia and Turkey demand was higher ahead of tax increases that came into effect on 1 January 2016, and across European Union member states, demand has increased ahead of the second Tobacco Packaging Directive coming into effect in May 2016,” the Australia-based company said. Operating profit in the Flexibles segment, which includes tobacco packaging, rose 6.1 per cent (constant currency) in the six months to 31 Dec.
Looking ahead, Amcor said, “it is expected a period of customer destocking will occur over the next six months, and tobacco packaging volumes in the June 2016 half year are expected to be lower than the same period last year.”
Tobacco packaging growth in Asia through 31 Dec, 2015 was “excellent” however lower volumes and higher operating costs depressed performance in the Americas, Amcor said.