Imperial Brands, a titan in the world of tobacco products, has just released its sale and revenue forecasts, and it’s not looking good… The groups had been banking on an increase in revenues before the end of the year. The group’s main threat is simply electronic cigarette competition.
Founded in 1901, the British company Imperial Brand’s is among the 5 biggest cigarette manufacturers in the world. As for all the titans in Big Tobacco, sales have globally stagnated year after year. As early as the first quarter of 2019, sales figures far below the first quarter of 2018 seemed inevitable.
Despite this, the company wants very badly to believe that sales will increase from 1 to 4% over the year 2019. A highly optimistic view of the situation, to say the least, but they went even further with promises of 4 to 8% growth. Investors did not take the bait, as alluring as it may have been. At the London stock exchange, Imperial Brands share prices fell significantly in a very short time period.
Vaping: a mightly competitor
How can we explain these declining sales figures among Imperial Brands products? First of all, this can be explained by the global reduction in smoking rates, and therefore cigarette purchases. Lung cancer risks related to smoking are now common knowledge, and awareness campaigns are more effective than ever. The absence of tobacco product advertisements, and neutral packaging regulations, have also played a part.
But most of all, it is the success of electronic cigarettes that is eating away at Big Tobacco stocks. And there is yet another issue plaguing them: while Imperial Brands made an attempt to position themselves on this market, the FDA has them cornered. The regulatory agency’s fears regarding the vaping epidemic in younger populations has led to strict limitations on the vaping market.
In this context, the company’s Myblu product line was met with a disinterested market anywhere outside the USA. In the end, only definitive sales figures for 2019 will tell us just how much ground cigarette manufacturers are losing worldwide.