Wealth Manager - the site for professional investment managers

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

MarketEye: Tobacco: a slow-burn success story?

To visit the MarketEye website please click here

For all the challenges the industry has faced tobacco has remained attractive for investors. Now, in the face of ongoing litigation, a crack-down on advertising, smoking bans, and even plain packaging, the industry is reinventing itself through new heat-not burn and vaping products.

We continue to believe these could create an inflection point for the industry, offering a route out for smokers looking to quit harmful combustible cigarettes but also allowing tobacco companies to build new revenues with products that are less detrimental to health.

Should they succeed we see tobacco producers continuing at the apex of a market where competition is limited and where profitability consequently remains extremely robust. In our bull-case scenario, smokers will consider the risk/reward dynamics of their habit and decide to migrate en masse to next-generation products. The significantly reduced harm of these new products keeps them in the category – meaning the combined volumes of combustibles and next-generation products stabilise or even rise.

Amy Chamberlain – global analyst. Newton, a BNY Mellon company

This content is provided by Market Eye, BNY Mellon’s blog. You can register to receive Market Eye updates by using the subscribe function below.

DISCLAIMER: 

Past performance is not a guide to future performance.

Investment Managers are appointed by BNY Mellon Investment Management EMEA Limited (BNYMIM EMEA) or affiliated fund operating companies to undertake portfolio management activities in relation to contracts for products and services entered into by clients with BNYMIM EMEA or the BNY Mellon funds.

For Professional Clients and, in Switzerland, for Qualified Investors only.

Any views and opinions are those of the author, unless otherwise noted and is not investment advice.

BNY Mellon take no responsibility, nor endorse any comments from third-parties which contain links to external websites outside of those of BNY Mellon.

Furthermore, this material does not constitute an offer or invitation to anyone in any jurisdiction to invest in any BNY Mellon product or use any BNY Mellon services where such offer or invitation is not lawful, or in which the person making such offer or invitation is not qualified to do so, nor has it been prepared in connection with any such offer or invitation.

BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to reference the corporation as a whole or its various subsidiaries.

This information has been prepared and approved by BNY Mellon Investment Management EMEA Limited. Issued in UK and Europe (excluding Switzerland) by BNY Mellon Investment Management EMEA Limited, BNY ellon Centre, 160 Queen Victoria Street, London EC4V 4LA. Registered in England No. 1118580. Authorised and regulated by the Financial Conduct Authority.  Issued in Switzerland by BNY Mellon Investments Switzerland GmbH, Talacker 29, CH-8001 Zürich, Switzerland. Authorised and regulated by the FINMA.

All information contained in this material is current at the time of issue and, to the best of our knowledge, accurate.

© 2017. BNY Mellon Investment Management EMEA Limited. All rights reserved.

This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from BNY Mellon. It is delivered on an “as is” basis without warranty. Click here for the full terms and conditions of use. BNY Mellon is committed to collect and store your details in a responsible way.  For details on our data collection and privacy policy, please refer to Privacy Policy. WEB00791

This article was provided by BNY Mellon Investment Management and does not necessarily reflect the views of Citywire

Wealth Manager on Twitter