Saturday, 22 January, 2022

Why the kings of cigarettes resist the coronavirus

Smoking kills. While smoking increases the risk of developing a severe form of Covid-19, the demand for cigarettes is not weakening. In a context where companies are publishing profit warnings and are careful not to announce forecasts, the majors of the cigarette are falling out of line. Tuesday March 31, Imperial Brands Plc which manufactures in particular the “Gauloises” and the “Kool”, announced that for the moment the viral pandemic had not had an impact on its commercial performances and that its sales remained in line with its expectations .

Three days later, the title shows an increase of more than 15%.

While British American Tobacco Plc, which said two weeks earlier was aiming for “another year of growth”, saw its stock rise by 12% over the last five days. Experts put forward several explanations. First, the stress associated with the pandemic pushes nicotine addicts to consume more. This is all the more so since tobacco vendors are still open – in the majority of countries – despite the confinement. Then, taking a cigarette break while working from home is perhaps easier than going out for a smoke when you’re at your desk.

Read alsoTelework in confinement, beware of addictive practices!

Flash in the pan?

This good performance in demand is perhaps only a flash in the pan caused by the reaction of the various economic players to the epidemic. So, Imperial Brands said its distribution company, which serves France, Italy and Spain, had built up substantial inventories to be able to ensure supply to retailers during the lockdown. Similarly, it is possible that smokers themselves have built up stocks of precautions, as some consumers have done for pasta or PQ, driven by the fear of seeing thetobacco shut down in case of tightening of isolation measures.

In addition, the fact that smoking is an aggravating factor of the disease must have caused some smokers to give up smoking in the months to come. But in the meantime, the heavyweights in this industry have more reason to celebrate. While there are still a few months, experts wondered about the accelerated decline of traditional smoking in favor of vaping, or even the consumption of cannabis, the Covid-19 pandemic offers a respite to this industry that can ensure the payment of hefty dividends in 2020, unlike most other businesses. But the medical community hopes that in the longer term the tobacco manufacturers will smoke – finally – the condemned man’s cigarette.

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