WORLDVIEW: BAT cuts jobs, vaping drama, and the end of sin stocks
Conventional wisdom has it that sin stocks β booze, cigarettes, gambling β are a solid bet: safe, reliable, and recession-proof. Increasingly, however, it is clear that these entities are not reality-proof.
Consider British American Tobacco, the venerable group that has ushered many a soul from their first cigarette to their premature, smoking-related death (smoking remains the world's leading preventable cause of death). BAT recently announced sweeping job cuts as it tries to reinvent itself as a vaping and tobacco heating business.
The switch to vaping comes as consumers have increasingly turned away from traditional cigarettes in favour of flavoured vaping products, which have enjoyed double-digit growth β a lot of it driven by teenagers who never smoked cigarettes but who enjoy the buzz and flavours of vaping products. BAT is racing against competitive upstarts like Juul to grab a piece of this new market as it grapples with falling cigarette sales.
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