11/29-12/5

Their are new concerns about whether menthol cigarettes should be included among the ban of flavored cigarettes put into effect by the FDA months ago. Studies show that menthol cigarettes make up almost 50% of all cigarettes smoked by regular smokers. Over half of young adults under the age of 18 say that they smoke menthol cigarettes, proving that menthol might be the last flavoring to get rid of before cigarettes aren't appealing to young adults anymore. If this ban is put into effect, the cigarette industry will suffer a major hit, not only will people potentially buy less cigarettes if forced to change from menthol to full-flavor, but some may stop entirely. This major change in the banning and selling of cigarettes has been an overall bad decision, in my opinion. Obama is trying to bring the economy back, but by restricting tobacco in so many ways, he is limiting a very high exchange of money in our economy and in our society. If the decision is made to ban menthol cigarettes, he will be putting the nail in the coffin for the cigarette industry.

11/22-11/28

Phillip-Morris recently lost a case to an emphysema victim and was charged $300 million. The public is now angry at the court for the amount of money that had to be paid, saying that the ruling was only for such a large amount of money because of how much money the company makes, and also what they're selling. The jury was impressed to hear that Phillip-Morris makes almost $10 million per day selling such a dangerous product, and figured that $300 million was chump change to them to end this case. If other cigarette companies start being worked like this, they will all lose all their money. It shouldn't be a matter of what they're selling or how much they are making, they are all selling the same thing and people know what they're buying and getting themselves into. It frustrates me to hear the company is being taken advantage of just because of the product that it sells.

11/15-11/21

One Tuesday, numbers were being crunched on the cigarette industry and a strange thing was discovered. The production of pipe tobacco was going through the roof, almost 400% past its normal sales. When investigate further, the peak happened almost at the exact same time as a new law was passed by Obama putting a 1000% tax increase on roll-your-own tobacco. A loophole was found by the tobacco industry, selling roll-your-own tobacco as pipe tobacco, thus saving their business because consumers didn't have to spend all of the extra money on taxes. This was a smart move for the cigarette industry, but now that the government knows about it, they are already in action making the terms clearer on the difference between pipe tobacco and roll-your-own. The cigarette industry will stay not see a hit for a little while, but once the new tax is put into place, expect a small drop in the market.

11/8-11/14

There were no big stories regarding the cigarette industry as a whole this week, but one particular story did seem to catch the eyes of investors everywhere. The Reynolds American company recently released that it is trying to buy out a smoking cessation company. It has raised eyebrows of people everywhere, making them wonder why a cigarette company would buy a company that is making products to stop people from smoking. If the company does do this buyout, and starts picking up business, I could potentially see every cigarette company getting involved in these kinds of business actions.

11/1-11/7

On Thursday, a federal judge made his final decision on a case brought up by the tobacco industry. The case entailed the ruling put into effect in June putting preventions on the advertisement of cigarettes. Many tobacco companies fought the ruling saying that it was preventing their freedom of speech, but the judge ruled in favor of the defendant meaning the act will stand. By not allowing the cigarette companies to promote their product in whatever way they please, they are hurting the overall sales of the industry. Those people that might have been enticed by the promotions will never begin buying the cigarette products, lowering the overall sales of the companies.

A court ruled Friday that 3 of the main tobacco companies no longer had to pay money to tobacco growing states from a settlement that occurred in 1999. The settlement claimed that the companies had to pay $5.15 billion to tobacco growing states through 2010. Since the companies no longer have to pay that settlement, they can invest in other ways to grow the industry. Considering that it is the top 3 companies, the entire industry should see a ripple effect by allowing these companies to keep their money. I expect a quick increase in the cigarette world.

10/25-10/31

NY has recently filed a dispute against Native Americans claiming that the Native Americans should have to pay taxes on their cigarettes just like everyone else. The Native Americans are sticking to a legislation made in 1794, which keeps them immune from having to pay taxes. The state, cigarette companies, and anti-smoking agencies are all standing behind this dispute for many reasons. First, the state would earn approximately $400 million or more per year, which would make up the difference in the $3 billion budget deficit towards schooling. The cigarette companies find it unfair, especially when there are people out there counterfeiting their brand name and selling it tax-free over the internet. Lastly, the anti-smoking agencies believe that thousands of people would stop smoking if they actually had to pay full price for a pack of cigarettes. The average additional cost of a pack of cigarettes for taxes is $2.75 for the state of New York, and its believed that there are millions of cartons per year being sold but not taxed. If the taxation were to take effect, the industry as a whole could potentially see an increase in sales. Those people who don't buy cigarettes locally would most likely do so if they realize that they are no longer saving money by buying these cigarettes online or under-the-counter. I agree with the state of New York that a taxation should be put on all cigarette sales and not only some of the them. If cigarettes are being sold and consumed in a specific state, then that state has the right to recieve some type of benefit from it.

10/18-10/24

A case was brought up in the Massachusetts court on Monday claiming that three smokers have the right to have their medical bills paid by Phillip Morris to have tests done that can show if the smokers have a future risk of lung cancer. The case passed the state court and will now be tried on the national level. The attorneys compared it to a pedestrian getting hit by a car: even if there are no external injuries, the person who may have caused the damage should pay for an inspection to see if there may be internal injuries. This could be bad news for the cigarette industry because if this case is won by the prosecutors, then smokers around the world could possibly get the same treatment, causing the cigarette industries to fork out a lot of money for all of the medical expenses. That would make a very big hit on every manufacturer.

With all of the bans and steady fall in the economy, the demand for cigarettes is dropping greatly. It was estimated on Thursday that the demand has fallen 10% since last year, making the profit margin for the cigarette industry a little thin. The raise in the federal tax price on cigarettes extremely affected the sales of cigarettes in April when the first raise was put into place, but the second raise in price didn't do as much damage. This tells me that those that are planning to be loyal to the cigarette industry are still going to be consumers no matter what the price is. So to make up for the loss in demands, I say that the cigarette companies slowly raise their prices for personal profit, which in turn would make up the difference, if not boosting profit past that of previous years.