Cigarette sales continued to decline in 2021, with US sales falling below 200 billion units for the first time on record. Simultaneously, new CDC data suggests a majority of Americans now favor an outright ban on cigarette sales. New York is spearheading a campaign for higher state taxes on cigarettes while Mexico and other nations are continually rolling out tougher international restrictions on smoking.
Big tobacco acknowledges the perpetual downtrend in cigarette revenues globally, but has yet to successfully deploy a replacement in most markets. Vaping devices like Juul have been slammed by federal crackdowns and lawsuits in the US throughout the past few years, and Phillip Morris’s IQOS heated tobacco device is currently being held up by an import ban. Neither vaping nor heated tobacco have failed, but the obstacles facing their proliferation will continue to hold back leading tobacco firms in the future.
Related Stocks: Philip Morris International Inc. (PM), Altria Group, Inc. (MO)
After bucking a pattern of long-term decline in 2020, US cigarette sales returned to contraction in 2021, as Federal Trade Commission (FTC) data shows the number of cigarettes sold to wholesalers and retailers nationwide decreased from 203.7 billion in 2020 to 190.2 billion in 2021, according to the Federal Trade Commission’s most recent Cigarette Report. UPI notes that 2021 marks the first time that sales have dropped below 200 billion and the level marks a -70% decline from peak levels of 636.5 billion in 1981.
Tobacco companies are spending more on advertising, which increased from $7.84 billion to $8.06 billion in 2021, but are now experiencing smaller returns on such investments as public sentiment and government regulation continue to turn against cigarettes and other tobacco products. The same pattern of weaker sales and higher advertising expenditure can be observed in smokeless tobacco products as well.
A new Centers for Disease Control and Prevention (CDC) study has discovered that 57.3% of 6,455 respondents would support prohibiting the sale of all tobacco products, while 62.3% support banning the sale of all menthol cigarettes. Even a quarter of current cigarette users who responded to the survey would support banning the sale of all tobacco products.
Despite the public generally becoming more opposed to the sale of tobacco, lawmakers have thus far remained far behind. Though over 360 localities have passed laws banning flavored tobacco products, according to data from the Campaign for Tobacco-Free Kids, Stat News notes that only two, Beverly Hills and Manhattan Beach in California, have…
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