Topline

The long decline in cigarette sales in the U.S. reversed last year as people stressed by the pandemic-linked lockdown started smoking again, raising revived fears about public health.

A man smokes a cigarette in Piazza del Duomo in Milan on January 19, 2021 as it became the first … [+] Italian city to introduce an outdoor smoking ban following the air quality regulations approved by the Milan City Council. – Milan municipality has declared war on smoking, no cigarettes in the city’s public parks, dog areas, cemeteries, playgrounds, sports and recreational areas for children, sports facilities including terraces, and public transport stops, including taxi ranks. The smoking ban is not total, there is an exemption in all these cases, you have to stay at least ten metres away from others. (Photo by Piero CRUCIATTI / AFP) (Photo by PIERO CRUCIATTI/AFP via Getty Images)

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Key Facts

In 2019, cigarette sales dropped 5.5% as smokers either gave up the habit or switched to e-cigarettes, a device that simulates tobacco smoking.

However, in 2020, as the pandemic forced millions of Americans to remain at home, industry-wide cigarette sales were flat year-over-year, a reverse of previous declines, said tobacco giant Altria Group Inc. (maker of Marlboro) on Thursday.

Altria speculated that people spent more on tobacco (as well as liquor) and less on gas, travel and entertainment to cope with the stress and anxieties of the lengthy lockdown.

Liberated from tobacco-prohibited offices, many employees were free to smoke at home. In addition, cigarette sales were boosted as vaping (via e-cigarettes) declined in popularity partly due to higher taxes on these products (Georgia, and Oregon imposed new taxes on vape products.)

Key Background

According to the CDC, cigarette smoking among U.S. adults fell to an all-time low of 13.7% in 2018 – a two-thirds drop since the 1964 Surgeon General’s report warning of the health consequences of smoking. But Altria said its own cigarette sales rose 3.1% in the fourth-quarter of 2020, and were roughly flat from 2019 levels for the full year. In the fourth quarter of 2020, Altria posted net income of $1.92 billion, versus a loss of $1.81 billion a year ago. In contrast, Altria’s cigarette sales had dropped 7.3% from 2018 to 2019. Ironically, while the health dangers posed by tobacco are well known, health concerns linked to vaping, including the risk of lung illness (as issued by the U.S. Centers for Disease Control and Prevention, in 2019), may have prompted some consumers to switch back to combustible cigarettes. However, while that illness was later linked to the vitamin E oil used in marijuana vaping products, sales of vaping products continued to decline last year. Moreover, to reduce underage vaping, the federal government raised the legal tobacco purchase age to 21 last year, while the Food and Drug Administration removed some sweet and mint-flavored e-cigarettes (popular with youths) off the market. Brian King, a deputy director of the CDC’s Office on Smoking and Health, urged users of both vaping products and regular cigarettes to cease smoking altogether and use FDA-approved smoking cessation medications (like Chantix and Zyban).

Big Number

480,000. That’s how many Americans die annually from the effects of tobacco, according to CDC, including more than 41,000 from secondhand smoke exposure.

What To Watch For

Altria said in its latest earnings call that cigarette sales in 2021 will largely depend on “smoker’s stay-at-home practices, unemployment rates, fiscal stimulus, … the timing and breadth of COVID-19 vaccine deployment and consumer purchasing behavior following the vaccine

Further Reading

Vaping Versus Tobacco: The Truth You Need To Know

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