Big tobacco took a hit last month when RJR laid-off 570 white collar employees, many of them experienced industry veterans. They’ve not all gone yet, but the indications are clear – cigarette volumes are shrinking and right now there is a significant amount of cigarette down-trading.
The industry supply side, which typically lags the industry, is playing catch-up and following right along.
Molins Richmond laid off 8 last week.
Filtrona USA announced a resructuring – effectively removing the Americas executive / global quality management team; leaving plant managers to run the business.
Maglio ceased trading somewhere around April / May and has not re-opened. nobody knows when or if it will.
There have of course been others and there will be more.
Do you have a comment on the state of the economy?
Is the tobacco industry down-turn independent of the economy or directly related?
Previously the industry has weathered economic down-turns well – but this appears not to be the case.
Let us know what you think?
6 comments ↓
Rumor has it that PM due to very soft volumes is laying folks off. Will be interesting to see if this is mentioned in their qrtly.
I agree I believe there is alot of downtrading to 4th tier products as consumers tighten up.
I would lean towards cosumption declines being the culprit as folks just can’t smoke everywhere like they could before.
I believe that there is some downtrading as Commonwealth had sizeable share & volume growth during the 3rd quarter.
Imagine the losses of people if the major tobacco companies didn’t partner with the government to get rid of all the 4th tier companies that were not MSA compliant. What a business!
We know one thing for sure the tobacco industry won’t be getting a stimulus package. They will without a doubt be a source of funding for the many socialist programs the new administration will give away to the people.
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