Where smoking is on the rise

By THE DATA TEAM

BRITISH AMERICAN TOBACCO (BAT) announced on January 17th a final deal to buy Reynolds American for $49bn. BAT already owns 42% of Reynolds; buying the remainder will create the world’s largest listed tobacco company by sales and profits. It will peddle brands such as Dunhill, Camel and Newport.

The casual observer might imagine the deal to be a frantic bid to revive an ailing industry. Smoking rates have indeed been falling overall. The World Health Organisation estimates that just over a fifth of adults smoked in 2015, down from almost a quarter ten years earlier. Although this decline has hardly helped tobacco companies, it has not been ruinous.

Meanwhile, smoking remains popular in many countries. In Indonesia, for example, more than three-quarters of men light up. Among men in Africa and the eastern Mediterranean, the habit is actually becoming more common. And despite the downward trend of global smoking rates, simple population growth has elevated the total number of smokers to about 950m, slightly more than in 2005. Combined with rising prices, this means that the value of retail tobacco sales jumped by 29% in the decade to 2015, according to Euromonitor, a data firm.

In addition, large tobacco firms are embracing potential threats. They are investing in electronic cigarettes, and are particularly bullish on new products that heat tobacco. Cigarettes may kill you, but the big companies that make them appear rather healthy.

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