by: Cassandra Laymon, CFP®, MBA
That’s an attention getting headline, don’t you think? Something I never thought I’d see in my life time! Before we start rejoicing about the big turn-around in the intentions of big tobacco, let me share some highlights of this story along with the “story behind the story.” As you know, when it comes to advertising, the facts are often altered to make the company appear as the hero.
Here’s the story:
At the turn of the New Year, as we were all making resolutions to lose weight or stop spending so much time on Facebook, or, to stop smoking…Philip Morris not so coincidentally announced that it, too, wants to stop smoking and get out of the cigarette business.
Why would Phillip Morris want to get out of such a profitable business that generates revenue from getting people – often young children – addicted to their product? (Read: Why We Don’t Invest in Tobacco Companies here.) Tobacco use in America is already on the decline as a result of better education about the health risks of cigarettes, more stringent underage smoking laws in America, and the companies raising prices to offset lower sales. This spin makes it look like they are doing something good, when the reality is that they are eliminating a failing product line.
No date or specific timeline has been offered from Philip Morris regarding their exit from the industry, and they intend to continue marketing and selling cigarettes in the meantime. This leaves us to wonder about all those good intentions of the company.
The story behind the story:
The real reason that Philip Morris is ready to exit the tobacco industry is that they already have a portfolio of products lined up to replace cigarettes. They position these new “heat and vaporized tobacco products” as smokeless and therefore a lower health risk than cigarettes.
You may be more familiar with the terms e-cigarette (electronic cigarette) and “vaping.” E-cigarettes are battery powered, and because they don’t use tobacco and don’t emit smoke, the companies argue they are “safer.”
They were originally developed to help wean smokers off tobacco products, but let’s be clear, e-cigarettes are not approved by the FDA as a smoking cessation tool.1
E-cigarettes still release nicotine, which is an addictive drug. So, smokers may just be switching out one addiction for another. The aerosol (vapor) that is released from the e-cigarette can also be damaging. There is little regulation around this industry and therefore it’s not clear what chemicals you might be inhaling.
Here is a big concern for me: The vapors used in e-cigarettes come in a variety of flavors like candy or chocolate, which makes vaping very appealing to kids. The regulations on the advertising and sale of e-cigarettes are not nearly as strict as tobacco, which makes these products more available to kids. As a mom, I’ve heard reports of kids not wanting to go to the restroom at school because of the overpowering smells like cotton candy that come from vaping in the restrooms between classes. It’s not surprising then, that in 2016, more than two million middle and high students used e-cigarettes each month.2
In previous blogs I shared stories of how tobacco companies are targeting young kids in the Third World countries by handing out cigarettes to children as young as 7 and 8 years old in hopes of getting them addicted. This, in turn, will increase the sales of the companies. After all, and addicted customer is a customer, for life, right?
And so we find ourselves right back where we were 60 years ago, with little regulation around a product that is appealing, yet extremely harmful to our kids.
If you were thinking that tobacco companies are suddenly a great investment because they’ve stopped selling cigarettes, think again. Remember that when you invest in a company, you are profiting from and partnering with the activities of that company. There are much better ways to grow your portfolio than by getting our kids addicted to harmful products.
Could you be investing in and profiting from the tobacco industry and not even know it? Have your portfolio screened for free here so you can avoid companies that oppose your values.
Financial Planning & Investment Advisory services offered through Beacon Wealth Consultants, Inc.