7 October 2003

                              Gallaher Group Plc                               

                   Savings Related Share Option Scheme 2003                    

Gallaher is again offering to employees in the UK (and a number of other
countries) the opportunity to participate in a Savings Related Share Option
Scheme (the "Scheme").

Four Executive Directors have applied to participate in this 2003 Scheme, each
with a monthly contribution of �250 and at an option price of �4.43. Options
have been granted to those directors, as follows:

Name                 Number of    Term of      Monthly          Vesting Between
                        Shares   Contract Contribution                         
                                                                               
Dunlop N W B D           3,577          5         �250     1 Dec 08 & 31 May 09
                                                                               
England, N M             2,082          3         �250     1 Dec 06 & 31 May 07
                                                                               
Northridge, N H          3,577          5         �250     1 Dec 08 & 31 May 09
                                                                               
Rolfe, M E               3,786          7         �250     1 Dec 10 & 31 May 11

Prior to applying to participate in the 2003 Scheme, Messrs England, Northridge
and Rolfe cancelled their participation in Gallaher's 2002 Scheme, which had an
option price of �5.59.



END