Home » tobacco sin stocks » Philip Morris International: No Longer In The Cigarette Game???

The reporters rushed their headlines to print the latest sin stocks headline: “Philip Morris International giving up cigarettes” they declared.

Seems like a corporate new years resolution with a do-good twist…

Tobacco sin stock and cigarette manufacturer Philip Morris International (PMI), who markets brands like Marlboro everywhere else it the world except the United States, takes out an ad in the paper that proclaims that they are going to no longer make cigarettes.

But is it true? And, should sin stock investors start to worry?

The short answer is NO.

As we reported in this post from July, Could Philip Morris International Change The Cigarette Game?, Philip Morris was exploring how heating tobacco instead of burning it provided a greater buzz without all the dangers of smoke.

So they are not getting out of the cigarette game. They are thinking about getting out of the smoked cigarette game. Early market tests in Japan and elsewhere show that this is a promising growth trend.

What does this mean for those who invest in sin stocks?

This is a marketshare play and a PR play for Philip Morris. They are painting it with a thick layer of philanthropy but they are really just looking to grow. And one way to grow is to shake off the “smoking is dangerous” banner that they are stuck with and to finally start offering a cigarette that is ostensibly healthier.

It cleverly changes the conversation from “cigarettes are addictive” to “smoking cigarettes is unhealthy”. It addresses the carcinogenic nature of smoked tobacco without needing to deal with the addictive nature of tobacco in general.

There are always a big group of people who wish they could quit smoking, and this will serve to win over those smokers in the same way that diet sodas (which aren’t necessarily healthier) provided an alternative to those who viewed regular sodas as unhealthy.

It’s likely that Philip Morris International (PMI) will roll this out before any other company… but you can be sure that other companies aren’t far behind.

An investment into Philip Morris International will give you the first mover advantage benefits. However, waiting to see what other tobacco manufacturers will do could still provide you with a strong investment strategy as new manufacturers watch and learn from PMI.

The one challenge that PMI will need to address is the habit of smoking… which e-cigarettes aren’t necessarily achieving in a broad way. Smoking is one type of habit, e-cigarettes still look a little weird. Ultimately, the winner will be the one who creates the healthiest (but still most addicting) cigarette that is like a smoking experience.

Read more about it in this article from The Nation: “Philip Morris to give up cigarettes manufacturing


Nothing on this site is a recommendation because, hey, I can't read your mind and I don't know what you have in your portfolio, and I'm not a licensed financial advisor. So never EVER trade without doing your due diligence. If you want more information about this fascinating topic, please check out the Sin Stocks Disclaimer page which basically says the same thing but more emphatically.