Cigarette Shares Plummet

Cigarette Shares Plummet 

In today's society, smoking is becoming less and less popular. It is seem as an unhealthy habit that can lead to many bad consequences. To compensate for the declining volume of smokers, many tobacco companies increased the price of cigarettes. This boosted stock prices and profits. However, that strategy is not going to work if the volume of smokers continue to decrease. The increase in prices might even influence current smokers to quit. There have been many large investments in smoking alternatives like E-cigarettes. E-cigarettes deliver nicotine without all of the harmful chemicals. However, the sales for e-cigarettes were not moving up as fast as expected. 

A device called IQOS was the biggest bet for a cigarette alternative. Instead of burning the tobacco, it just heated it to where the user could get the dose of nicotine without the harmful chemicals. It is the closest thing to a cigarette and was predicted to have a great sales result. The device was released in Japan, one of the biggest smoking countries, and it only captures 3% of the smokers there. 

“Device sales were slower than our ambitious expectations,” Philip Morris Chief Financial Officer Martin King said on a call with investors.

We are seeing less and less smokers each year. It seems that today's society is focused more on using their money for more important things. People no longer want to feel good by putting something addictive and possibly harmful into their bodies. 

Written by Shawn Pham

WSJ Article