Tobacco.org

Cigarette Makers: Burning Hot or Up in Smoke? 

Key Points

* Cigarette industry stocks have been trading higher as they represent a safe haven investment and have been reporting higher profits due to strong pricing power.

* Cigarette volumes have been on the decline amid higher prices and anti-smoking advertising campaigns, which has led to a sharp drop in demand.

* New regulations could inhibit new products from quickly entering the market, but help already-established companies maintain their dominance.

* Eventually, lower volumes will take their toll on bottom-line results as price increases cannot be relied on indefinitely to support net income.

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