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Reuters, 15/04 14 19 CET

LONDON (Reuters) Britain’s Imperial Tobacco plans to shut cigarette factories in England and France with the loss of about 900 jobs, it said on Tuesday, as it grapples with declining sales in Europe.

The maker of Gauloises and Davidoff cigarettes blamed tough economic conditions, increased regulation and taxes, and growth in the illicit tobacco trade for the closures.

«These projects are an essential part of securing the sustainable future of the business,» said Chief Executive Alison Cooper. «The prospect of job losses is always regrettable and we will be doing all we can to support employees and ensure that they are treated in a fair and responsible manner.»

The closures will take place over the next two years and production will be relocated to other European factories. In place of a Nottingham distribution centre also being shut, distribution will be outsourced.

The Nottingham, central England factory and distribution centre employ 540 people, but the factory is only expected to produce 17 billion cigarettes this year, or 47 percent of its capacity. The Nantes factory in France employs 320 people, and will produce about 43 percent of its capacity.

There is also a proposal to close the company’s Bergerac research and development facility in France and restructure its sales force and support function in Paris, which would affect 120 jobs, though the company said 80 new jobs could be created.

The moves are part of Imperial Tobacco’s wider plan to deliver annual savings of 300 million pounds a year from September 2018.

Consultations with employees, works councils and trade unions are underway, the company said.

The news comes a day after French union representatives said the Nantes plant was slated for closure.

Imperial shares were up 1.2 percent in afternoon trading.

(Reporting by Martinne Geller in London Editing by David Goodman and Mark Potter)

euronews provides breaking news articles from Reuters as a service to its readers, but does not edit the articles it publishes.

Copyright 2014 Reuters.

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