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Manchester - Britain's opposition Labour party said on Tuesday it would introduce a US-style "sin tax" on tobacco firms if it wins a national election next year, sending shares in the leading cigarette groups lower on the day.
The tax, which was unveiled ahead of Labour leader Ed Miliband's speech to his party's annual conference, would be based on firms' market share and would aim to raise at least $245.78m, the party said in an advance briefing note.
Shares in British American Tobacco and Imperial Tobacco were both down by 1.7%, although shares in both companies had already been trading lower as the broader FTSE 100 index fell 1.4%.
Big tobacco companies are already at odds with the British government over plans to implement a law requiring tobacco products be sold in plain packaging with graphic health warnings and no branding.
The UK government said in April it was prepared to move forward with the plan aimed at reducing the lure of smoking to young people, published draft regulations in June and finished a six-week consultation in August.
Philip Morris has said it is prepared to sue the government should it move forward with such a law, whose implementation in Australia has led that country to face challenges at the World Trade Organization.
Labour are narrowly ahead of Prime Minister David Cameron's Conservative party in the polls, after a lead of up to 10 percentage points slipped over the last 12 months. A YouGov poll released before Miliband's speech on Tuesday put support for Labour at 35% against 33% for the Conservatives.
