Tobacco company Gallaher Group's cigarette volumes in the State have dropped 9.3 per cent following the introduction of the smoking ban at the end of March.
In a trading statement today the company added that successive, above-inflation increases had also negatively affected the affordability of tobacco products.
Gallaher's British parent said today overall volumes were up over 6 per cent in the first five months of 2004 but that trading in continental Europe remained difficult.
The maker of Benson & Hedges, Silk Cut and Mayfair cigarettes said it had gained from a fall in cross-Channel trade with the British cigarette market down only 1 per cent compared with 2003 after sharper falls in previous years.
Other European Union markets including Austria, France, and Germany have seen significant declines in duty-paid tobacco volumes, which had accelerated as the year progressed.
Markets in Austria, France and Germany have seen falls due to increased taxation and cross-border trade.
Market volumes in the five months fell 8 per cent in Austria, 26 per cent in France, and more than 13 per cent in Germany.
Gallaher shares dipped 2.4 per cent to 684-1/2 pence by 9.43 a.m. following the trading statement which came before the close of the group's half-year at the end of June, and prior to its first-half 2004 results in early September.