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 traditional manufacturer-made electronic cigarettes rose an astonishing 97 per cent. This was led by JUUL, who own a 49.6 per cent market share in the United States, but does not include sales from the Chinese manufacturers that are popular in vape shops (Smok, Innokin, Aspire, Wismec, etc.). In New Zealand, Nicotine vapes are popular along with non nicotine vapes.

Talking regionally, Australia had the biggest drop for PMI at 18.3 per cent. Eastern Europe was down more than ten per cent, and the European Union was down 6.7 per cent. The only gain was made in South and Southeast Asia, up 6.1 per cent. When one-third of worldwide cigarette sales are made in China, that’s not difficult to understand.

Read More: https://blog.thevapestore.com.au/vaping-is-killing-the-cigarette-industry/#comment-5154687968

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