🙂 I am sitting in the train from Verona to Munich, now sitting in Trento. It is Sunday noon, 12.05 hours. It was a short night, because yesterday’s performance of “Carmen” in the Arena was long (and nice) and the train should have left this morning at 9.05 a.m.
🙁 However, the train was (and still is) two hours late.
Consequently, I enjoy that there is time for reading the paper and for twittering and blogging.
I am reading an article about the tobacco industry in the business sector of the “Frankfurter Allgemeine Sonntagszeitung”. Reemtsma is mentioned as a prime example. Incidentally, Reemtsma is now a sub-company of “Imperial Tobacco”, which is one of the great global players in the tobacco industry, similar to A.-E. Inbev with beer. Personally, I associate Reemtsma with “Ernte” – which I used to smoke for some time when I was 14, before switching to Rothändle and Gauloise (of course, without filter).
So I read that Reemtsma had a turnover of 470 million Euros last year, with a profit of 234 million Euros. That equals a profit rate of 50 %. Even Inbev, at 30 %, has a smaller margin than that … One way or another, I know why I do not particularly like global players who think they have to dominate entire sectors with all the consumers world-wide.
In the same article, I found a citation by Warren Buffet:
You produce cigarettes for one cent and you sell them for one dollar. They are addictive and the salespersons remain true to their brand.
That is what he said 20 years ago. He is said to have changed his mind later.
But there is one problem the tobacco industry faces:
Young people smoke less.
Here is how the Sundays FAZ continues:
For the industry, the most lucrative thing that can happen is for young people to start smoking as early as possible. The really faithful smokers, those who consume tobacco until their middle and late years, started early – around the ages of 12 to 15.
…
If however, someone started smoking as late as 18 or even older, the danger of him becoming and continuing to be a smoker is considerably less.
There is a citation by the business lawyer Michael Adams:
“Cigarettes are a lucrative business taking advantage of customers.”
and
“The decision of an underage person to start smoking is the most costly decision of his life. Incidentally, 80 % of them will later regret it.”
These are all things the industry is perfectly aware of. Here is more:
The tobacco sector agreed on a self-restriction in advertising. They no longer use famous people for advertising, according to their own information no longer use models younger than 30 and no longer do any advertising near schools. Advertising in magazines is now forbidden, anyway.
To make up for it, the industry continues to put posters all over the place. And apart from that, the young consumers are not lost sight of, either.
Of course, I am implying that Imperial Tobacco is working quite hard at developing the smoker market among juveniles and children.
As I continue reading, I find more exciting information:
Location bans and a restriction on advertising are only insignificantly detrimental to the tobacco industry. The one thing that really hurts them is higher taxes on tobacco. Especially among children and adolescents, they caused a demand decline. In industrial countries such as the USA and Germany, higher cigarette prices by 30 % due to higher taxes reduced the sale by 12 %. The effect of more expensive cigarettes among adolescents is even more pronounced. They buy 36 % less if the prices increase by 30 %.
In my book, the protection of adolescents was one of the main reasons for voting like I did in the plebiscite. I, too, feel sympathetic towards the pub around the corner “with the landlord who is a smoker and the four regular patrons who smoke”. There is nothing nice about people who come from a difficult background and live in social loneliness perhaps losing their last social resort, just because they are no longer permitted to smoke where they used to meet and cannot or do not wish to do without the cigarette.
But my – hopefully morally responsible – balancing of values presumes that the reduction of opportunities to start tobacco consumption among adolescents, for instance in discotheques and “intellectual pubs”, is more important than the well-being of elderly smokers.
This is even exacerbated by the fact that many people went on to develop their strong dependence on hard drugs after having started out with cigarettes. That is why I consider a clear and simple law for protecting non-smokers (especially children and adolescents) important.
I am not worried about the tobacco industry finishing worse than they do now or that they might be reduced to a niche existence. This industry earned plenty of money for its shareholders for many decades. As I see it, a profit of 50 % in a hitherto rather risk-free business is amoral. Considering the specialties of the stimulant tobacco, it is even criminal.
RMD
(Translated by EG)
P.S.
I could easily imagine that many young people smoked their first cigarette on the “Wiesn”.
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