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(Bloomberg) – Tobacco inventories experienced their biggest drop in five months after industry data showed an escalating deterioration in cigarette volumes.
The 11.2% drop in cigarette volumes for the four-week period ending May 18th seems "terrible" and will only become "progressively less bad" for the rest of the year, writes the newspaper. Citi analyst, Adam Spielman, in a research note. It expects a drop of 6% for the year, less than the 4% to 5% forecast by Altria Group Inc.
Altria and its counterpart Philip Morris International Inc. fell more than 4% to their lowest trading points in New York on Tuesday. The two-member S & P 500 Tobacco Index posted its largest decline since December 18th. In Europe, British American Tobacco Plc lost 3.3% and Imperial Brands Plc, 2.4%.
The tobacco industry is also struggling with a challenging regulatory and legal environment, as alternative products are less harmful than traditional cigarettes, including electronic cigarettes and vape machines such as Juul and IQOS. Sector data compiled by Bloomberg Intelligence showed a 111% increase in retail sales of e-cigarettes over a four-week period compared to the previous year, analyst Kenneth Shea wrote in a note.
To contact the reporter about this story: Janet Freund in New York at [email protected]
To contact the editor responsible for this story: Catherine Larkin at [email protected]
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