CARRERAS Group, the large cigarette distributor, has cautioned that its volumes could drop this financial year due to additional tobacco restrictions.

Volumes initially dropped by one-third in its previous financial year due to the implementation of the smoking ban in public places.

“As we continue to operate in a very challenging environment with impending changes to tobacco regulations, we expect volume growth to continue to be challenged for the rest of the financial year,” Managing Director Marcus Steele said in his statement accompanying the company’s financials.

Despite the concerns, Carreras posted $613 million in quarterly net profit from $2.6 billion in revenues or 26 per cent higher profit than a year ago.

The Government aims to implement a second phase of tobacco restrictions which could include a ban on tobacco advertising, promotion and sponsorship. However, there is no stated timeline for the implementation. It forms part of the international Framework Convention on Tobacco Control (FCTC), ratified by Jamaica in 2005.

The Jamaica Observer was told that Steele was out of office for the week and that the head of finance was also out of office. However, a key source within Carreras’ corporate department told the Caribbean Business Report in a phone interview that the company ceased media advertisements years ago but continues to promote and sponsor events geared at adults.

“We believe in balance when it comes to the implementation of these restrictions,” added the source. “Carreras markets responsibly to adults who have taken the decision to smoke.”

In August, Health Minister Dr Fenton Ferguson said Jamaica remains committed to implementing further obligations under the FCTC. It follows the smoking ban in enclosed spaces implemented last year under the Public Health Tobacco Control Regulations 2013.

Carreras made $4 billion in net profit for the year ending March 2014, or roughly one-third less than the $6.4 billion made a year earlier. The company faced the introduction of public smoking restrictions, new public health labelling and double-digit currency depreciation against the US dollar.

— Steven Jackson