JTI announces Gallaher closure

The closure of the Gallaher tobacco packaging plant in Ballymena will result in 877 redundancies, beginning in May 2016. Gallaher is a subsidiary of Japan Tobacco Incorporation (JTI) which has described the move as optimising its operations and strengthening its competitive position. While not explicitly stated by the company, labour costs are much cheaper in Poland and Romania.

JTI blamed a “challenging economic environment” and pressure from excise taxes which has reduced demand in Europe. The new EU Tobacco Products Directive was listed as a secondary reason. The Directive requires picture and text health warnings to cover at least half of a pack and allows member states to introduce standardised or plain packaging.

The European Commission was responding to pressure from governments and MEPs and defends the Directive on health grounds. Tobacco contributes to 700,000 fatalities across Europe each year and the majority of smokers start before the age of 25. Local political representatives also pointed to the smuggling and sale of illicit tobacco, which accounts for around 10 per cent of the cigarette market.