Spain Finance & Business - Friday January 4 2008

Spain Finance & Business - Friday January 4 2008
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By h.b. - Jan 4, 2008 - 1:55 PM

Archive Photo EFE

Cigarrette prices rise in Spain as inflation bites hard

Tobacco prices are set to rise again in Spain with Marlboro, L&M and Chesterfield up in price by between five and ten cents. It takes the cost of a packet of Marlboro to 3 €. All the brands to see a price increase are from the United States producer, Phillip Morris. The Altadis brands, such as Fortuna and Ducados, and the Japan Tobacco International brands, such as Camel and Winston, are likely to follow suit and announce price hikes shortly.

The difference between the inflation rate in Spain and the rest of the Eurozone has now increased to 1.2%. The figure for the Eurozone ended 2007 unchanged at 3.1%, while the number in Spain rose to 4.3%, it’s highest level since August 2006.
These are advanced numbers from the European Commission and the European Central Bank, both of which have been warning that inflation was set to increase at the end of the year. The increase comes as a consequence of the increased oil prices, and also the higher costs of basic foodstuffs. A new study published today claims that the average family will have to find an additional 992 € this year to pay for such items. The definitive figures for December’s inflation are published on January 16.

Problems for construction companies in Spain continued today with Sacyr Vallehermoso suffering a severe correction on the stock market and losing 9.6% in value. The fall today came after a 7% jump in the shareprice at closing time yesterday, the result of what is now known to have been an erroneous order to purchase. It seems the error was made by a BBVA broker who purchased 9.8 million € worth of the company’s shares by mistake yesterday.

As rumours continue about a possible take over of the British mortgage bank, Alliance and Leicester (A&L) by the Spanish giant Santander, the Financial Times reports today that one of the main shareholders in the British bank has said the take over would have advantages from an industrial point of view. Initially however reports indicate that A&L have rejected the first offer price made by the Santander President Emilio Botín. A&L shares have jumped close to 17% this week on the speculation.

A new report by Interbrand has named the Spanish Banks, Telefónica and Zara as the most fashionable brand names in Spain at the moment. Telefónica, Movistar, Santander, BBVA and Zara have all consolidated their positions with respect to 2005, according to the new study which is only published every two years.

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