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5 Mind-Blowing Facts About Cigarettes

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Altria Group (NYSE: MO  ) , Philip Morris International (NYSE: PM  ) , and other tobacco companies sell products known to be hazardous to consumers' health. Governments around the world have stepped up efforts to curb cigarette smoking, leading to an overall decline in the rate of smoking over the last three decades. However, some of the facts stated below show that demand for Altria and Philip Morris' products will subsist for many years.

Fact 1: 198,000 cigarettes are consumed every second
The percentage of the global population that smokes cigarettes has declined since 1980, but, due to population growth, the total number of smokers has increased. Worldwide, people smoked 1.2 trillion more cigarettes in 2012 than in 1980. The 6.2 trillion cigarettes consumed in 2012 works out to 198,186 cigarettes smoked per second.

The growth in the smoking population is not proportional around the world, however. In Altria's home market -- the United States -- the number of smokers declined by 27% from 1980 to 2012. Similar declines have taken hold in other developed nations, where cigarette taxes tend to be higher and restrictions on advertising more severe.

Developing nations, on the other hand, have buoyed Philip Morris' profits by combining booming populations with low advertising restrictions. To combat rising smoking rates, Uruguay raised cigarette taxes and imposed advertising restrictions; its smoking rate plummeted by 25% in three years. If other developing nations follow suit, Philip Morris' user base could start to shrink.

Fact 2: The vast majority of smokers are poor
Given that developing nations are responsible for the increase in global cigarette smokers, it should be no surprise that close to 80% of smokers live in low- and middle-income countries. Even in developed countries such as the U.S., smokers tend to be poor and uneducated. The impoverishment of the smoking population may contribute to the success of higher tobacco taxes in lowering the rate of cigarette consumption.

Fact 3: Cigarettes are more addictive now than they were in 1997
Cigarettes are delivery vehicles for nicotine, the addictive ingredient that compels smokers to keep smoking. One would think that regulators would enforce lower nicotine standards in an attempt to ween the public off the ingredient. However, researchers discovered that 11% more nicotine was delivered by the average cigarette in 2005 than in 1997. This may help explain why the smoking rate is starting to level off in the United States after years of declines.

Fact 4: Cigarettes contain arsenic, formaldehyde, and hydrogen cyanide
Cigarettes contain about 70 cancer-causing chemicals, including doozies such as arsenic, formaldehyde, and hydrogen cyanide. The chemicals found in cigarettes are responsible for the deaths of millions of people each year. This is why warning labels are now taking over cigarette cartons; many of Philip Morris' warning labels take up half of the carton. Australia is the least-hospitable place for Philip Morris. Its laws require health labels to cover 75% of the front of cartons and 90% of the back, and ban the use of brand logos. This makes it difficult for well-known brands like Marlboro to maintain a dominant market share.

Fact 5: Tobacco killed 100 million people in the 20th century
Nearly twice as many people have died from tobacco-related illness than died in World War II. Tobacco kills 6 million people each year. World Health Organization estimates that, left unchecked, that number could rise to 8 million per year by 2030, which would put tobacco on pace to kill 800 million people in a century.

Of course, tobacco regulations will continue to grow more stringent as the years go by. Citigroup believes cigarette smoking rates could approximate 0% in developed countries by 2050. As the deaths pile up, so too will the regulations that make it difficult to add new demand to the market.

Bottom line
Altria and Philip Morris may not be selling cigarettes in 2050, but there is still ample demand and pricing power to tide them over for a few more decades. If nothing else, the 6.2 trillion cigarettes consumed each year -- more than a half-century after the dangers of smoking were revealed on a large scale -- serve as evidence that Altria and Philip Morris are not going out of business anytime soon.

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Read/Post Comments (12) | Recommend This Article (20)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 01, 2014, at 2:26 PM, bearpaw wrote:

    You would be a fool to smoke cigarettes!

  • Report this Comment On February 01, 2014, at 3:14 PM, Ksophmomma wrote:

    Hard to stop - when frustrated & no crayons

  • Report this Comment On February 01, 2014, at 10:23 PM, mansourg54 wrote:

    If the same logic of health issue is applied to other companies then KO, PEP, NCD, KRFT, MDLZ, CPB, BUD, STZ, BEAM, DEO etc. will be out of business by 2050. Since the PM spin-off in March 2008 MO has been selling 32Billion to 34Billion cigarettes/cigars every quarter. If the 3-5% decline in cigarette consumption is true there would be no smokers left in the US because we have been hearing the same for the past 40 years. Cigarette smoking is far less harmful than eating hot dogs, stakes, lobsters, cake, chocolates, donuts etc. If you eat as many of those as smoking cigarettes you will not last one year. Most smokers have been doing so for 10, 20, 30, 40, 70 years and they are still alive and healthy. Taxes on cigarettes are increased not because of health hazard but because the tobacco companies are highly profitable and governments want to take a bite out of this pie. In 1998 the tobacco companies agree to pay $206Billion to the states as compensation for the treatment of smoking related illnesses. The states did not spend a dime on cigarette cessation and spend the bulk of the money building roads, bridges, schools and highways. There are at least 1.2Billion smokers but we do not have 1.2B people with lung cancer.

  • Report this Comment On February 02, 2014, at 2:07 AM, twoterriers wrote:

    I found out last March that I had cancer. It was not lung cancer, but what I did find out was every time I lit a cigarette, I was promoting the cancer. Cancer needs what the cigarettes have to continue to grow at an alarming rate. Take it from me that having a cigarette is NOT worth the cure for cancer. I am still fighting this damn cancer and no longer smoking.

  • Report this Comment On February 02, 2014, at 3:52 AM, sq wrote:

    There is a direct link to smoking and bladder cancer. A hidden killer that suddenly appears. # 6 cancer killer in the US today and rapidly growing. Starts as bladder cancer and if untreated spreads throughout the body!

    Please make wise decisions.

  • Report this Comment On February 02, 2014, at 3:58 AM, servantoftruth wrote:

    Only the very stupid, self-haters and extremely suicidal would so something to themselves ensuring the destruction of their health and deaths. 100 million of very stupid people died from smoking in the last century. It shows that there are very few very smart people in the world.

  • Report this Comment On February 02, 2014, at 5:49 AM, oneofthemasses wrote:

    The problem with the statement of 100 million died of smoking is based on a preconceived notion. Person dies of cancer, stroke or heart disease the first thing that people regurgitate is did they 'smoke'? I've has 5 close people die in the last ten years. Three of the five never smoked. Two from cancer that never smoked. Nor where they around it. Two of heart disease that didn't smoke. One from the side effects of the drugs doctors prescribed. There are just too many substances in our environment to pin down a cause to every disease. It doesn't help we have a FDA that approves compounds and additives in our food and water known to be health risk. Or allow genetically modified food to be sold when it's banned in 60 countries because of the health risk. Remember super man, Reeves wife? Lung cancer, never smoked.

  • Report this Comment On February 02, 2014, at 12:19 PM, nurseratchet wrote:

    DUH!!! The medical profession has been loudly telling people these things for many years. People practice "willful ignorance" and turn a deaf ear to our warnings. Nothing says I'M STUPID like a smoker. Have a little will power. Try denying your urges for your health.

    I put myself through nursing school working in a bar, and yes, I smoked before I clued in. After I started clinicals and saw how horrible the effects of smoking are, I quit and never looked back. Volunteer at a hospital where people are dying from smoking related illness and you'll see. It is a horrible, self inflicted way to die, and most health care workers have a really hard time feeling too sorry for people who are too weak and stupid to help themselves!

  • Report this Comment On February 02, 2014, at 12:36 PM, thomaskanary wrote:

    None of these facts will slow down the addicted smoker.

  • Report this Comment On February 02, 2014, at 1:15 PM, PhoenixJack wrote:

    Yes, fact #2 is very true. I lived on skid row for a few years and every one there was trying to bum a smoke from anyone. It took up most of their time. Many would use the last of their money to buy smokes then use it for bus fair so they could look for a job.

  • Report this Comment On February 02, 2014, at 8:45 PM, SabineTawni wrote:

    nurse ratchet: Wow, your screen name suits you well! Hopefully, you and others of your ilk wiil never care for me or one of mine. So sad P.O.S. like you go to nursing school. Ugh!!

  • Report this Comment On February 03, 2014, at 2:00 AM, GFKillah wrote:

    On a long enough timeline, the survival rate for everyone drops to zero.

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Ted Cooper

Ted Cooper is a value investor based in Texas. He does not ride a horse to work.

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9/1/2015 4:00 PM
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