Revenue for smokeless products grew 11% in 2010, research finds, but in Q2, Philip Morris saw 7.5% increase in cigarette shipments to Asia, including Indonesia, Japan, Korea, Thailand
October 7, 2011
– Stocks throughout the cigarette industry are exceptionally volatile of late. While traditional cigarette companies are facing heightened FDA regulation, non-traditional tobacco products and smoking cessation products are facing less criticism. The Bedford Report examines the outlook for companies in the Cigarette Industry and provides investment research on Altria Group, Inc. /quotes/zigman/294903/quotes/nls/mo MO +0.78% and Philip Morris International, Inc. /quotes/zigman/499558/quotes/nls/pm PM +0.33% . Access to the full company reports can be found at:
Bay Area anti-tobacco advocates have begun lobbying elected officials to urge the federal government to ban the use of menthol in cigarettes and other tobacco products. Menthol flavoring makes cigarettes more palatable to new smokers, increases the smoking rate among African-Americans and may make it harder for some people to quit, public health advocates say.
Meanwhile, cigarette makers continue to clash with regulators in federal court over new graphic labels and advertising that use pictures of rotting teeth and diseased lungs to warn consumers about the risks of smoking. The tobacco industry asked Judge Richard Leon last month for a temporary injunction to block the US Food and Drug Administration's requirement for the labels, pending a final decision on whether the labels are constitutional.
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With increasing regulatory pressures companies in the sector are looking to transition into different smokeless tobacco products. Revenue for smokeless products grew 11 percent in 2010. Presently, Altria offers smokeless tobacco products under the Copenhagen, Skoal, Red Seal, and Husky brands. Though chewing tobacco has been associated with various oral ailments, it is considered by some to be less hazardous than smoking and isn't as tightly regulated.
Especially important in Philip Morris' second quarter were large gains in cigarette shipments of 7.5 percent to Asia, including Indonesia, Japan, Korea and Thailand, and the favorable impact of acquiring Fortune Tobacco Co. in the Philippines.
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