Vaping is killing the cigarette industry
Many of you reading this have switched away from smoking traditional combustible cigarettes thanks to vaping, and cigarette manufacturers are feeling the pinch. Citigroup analyst Adam Spielman recently downgraded shares of Altria, the parent company of Philip Morris International (PMI), from “buy” to “neutral” following a weak earnings report. The result? A 16 per cent drop in share prices for the Marlboro manufacturer, which Altria called their “worst day in a decade”. The cigarette industry has been falling year-on-year in sales volume for some time now, but in a very predictable manner. Generally the volume sales of cigarettes fall between 3 to 4 per cent each year, which is offset by manufacturers with a price hike. Wells Fargo Securities estimated in 2013 that sales of electronic cigarettes would surpass traditional cigarettes in 2022, but this recent news could accelerate that. In the same period that PMI lost 7.6 per cent of their sales volume, revenue from the sales of tr...