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.

10/11-10/17

The Institute of Medicine of the National Academies has released results claiming that smoking bans are effective in reducing the risk of heart attacks. The bans against smoking in public places as well as more health-safe cigarettes are leading to a decline in secondhand smoke related heart attacks. As long as they continue to see a decline, more and more states I'm sure will adopt these bans against smoking cigarettes. These bans are why the prices of cigarettes keep going up, causing less people to buy cigarettes. The government is slowly weening people off of the need for cigarettes, which is hurting the stocks of the cigarette industry very much. As long as the industry doesn't have to increase the price of cigarettes too high, they may not notice a difference. Let's hope for that.

10/4-10/10

Not much has happened as a cigarette industry as a whole, but the big talk of the stock market world is Reynolds American's big cash dividend. The company has raised its dividend 5 cents to now make it 90 cents per share. This dividend is showing the company's loyalty to its shareholders by giving them approximately 2/3 of their net income. This is showing a good choice on my part to make Reynolds American one of my top stocks to invest in. They are known to be one of the more concrete stocks to invest in, seeing as the cigarette industry can never go down too far as long as people still need to smoke. This is some very happy news for me as well as many other stock marketers in the cigarette industry.

9/27-10/3

Reynolds and many other cigarette companies have asked the Supreme Court to hear a ruling made on May 22 that cigarette companies can no longer put "light" and "low-tar" on the names of their cigarettes. The cigarette companies are claiming that it would take millions of dollars and completely change their business tactics if this law were to be put in effect. I agree with both sides of this argument. Putting the word "light" on a pack of cigarettes makes the consumer think that the cigarettes are better for you, which isn't true at all. However, switching the names of cigarettes would not only cost a lot of money, but also make the consumer switch the name of the cigarettes that he or she has been smoking, causing confusion. I don't like this law and I hope that the cigarette companies can win this fight to overturn it.

On Thursday, the FDA began collecting millions of dollars in fees from the cigarette tobacco companies. These fees will go to the new Center for Tobacco Products, a part of the FDA that will be overlooking the cigarette industry. This industry is what has been in charge of stopping the selling of flavored cigarettes and putting restrictions on the term "light" used in cigarettes. These millions of dollars in fees are affecting many cigarette companies, but Altria, who owns Phillip Morris USA, most of all. Altria will be responsible for paying over half of the fees to the government. These fees are starting out at around $23 million, but will grow to $712 million by 2019. These fees are going to kill the growth of the cigarette industry. The only hope we have are that the changes that the FDA makes will cause more people to begin smoking, but most likely that isn't going to happen. I can't see how anything good can come from this in terms of a marketing aspect.

9/20-9/26

On monday, an analyst studied the cigarette industry as a whole, to see what brands and factories are up, and which are down. His conclusions were that Marlboro along with Phillip Morris is in a decline right now. The only way that they will keep their market price high is to drop the price of the tobacco due to the fall in employment in the U.S. Marlboro seems to be the only company experiencing this need to drop prices, as Reynolds America, along with many other lower-priced tobacco producers, seem to be catching the eye of many more people trying to save a couple bucks.

A ban was put in effect on Tuesday completely stopping the selling of fruit, candy, and clove flavored cigarettes in the U.S. The FDA says that the flavored cigarettes are more appealing to young adults, making it more likely for them to become regular cigarette smokers. It is said that 90% of adults started smoking before the age of 18, which is why the government is enforcing this ban. This ban will not turn out well for the stock market industry, due to a drop in cigarette purchases with the absence of more appealing cigarette flavors. We can only hope that the kids that were normally buying the flavored cigarettes will make the switch to menthol and regular cigarettes.

The cigarette industry is becoming known as "Armageddon Stock." Reason being, if another financial crisis ever broke out again, cigarettes would be one of the things that people would start trading above money. This is a good thing when it comes to stocks, because even if the market goes down, it's safe to know that the cigarette industry won't take as big of a hit as some of the other industries would. Many of the cigarette companies are starting to bounce back early in the stock market because they never really lost too much when the economy went down.

Phillip Morris has also just upped its cash dividend again from 54 to 58 cents per share, showing that they have extreme confidence in the ability for the cigarette market to put out. The fact that population is expected to grow in the future, cigarette companies have a good chance of getting a lot of new smokers to add to the market.

9/6-9/12 Cigarette Industry

Vector Group has announced on September 8th that it will be paying a $.40 quarterly cash dividend starting September 29th. Those who own shares as of September 18th will receive the dividend. I'm pretty excited about the $.40 per share considering how much I invested in this company. With the stock market fluctuating so much, it is good to know that a company still thinks about its stock holders enough to provide dividends. With the shares only being an average of $16 per share, I don't know how smart of a decision it will be to pay out so much money to the stockholders. It could potentially boost stocks greatly in this company if people invest knowing that they will receive a quarterly dividend.

The Reynolds American Company and Wellstone Filter Sciences have filed a lawsuit against the government concerning the government forbidding the promotion of "safer cigarettes". The cigarette and filter company are teaming up to argue that forbidding them to promote the cigarettes are hurting their potential gains in the market. The government believes that promoting a "safer cigarette" will cause people to start smoking or keep smoking longer. I personally believe that knowing more about a cigarette that will be less hazardous to my health would be life changing. If I were a either a seasoned smoker or a new smoker it would not negatively affect me knowing about a safer cigarette. If they win this lawsuit, I feel like the Reynolds Company's business will sky-rocket.