Tobacco companies may have trouble with smokeless tobacco products
Listen to the story (British accent)
There is bad news for people who invest in companies that sell tobacco products, like Philip Morris International (PMI) and British American Tobacco (BAT).
Traditional cigarettes used to be a major source of income for tobacco companies, but they are becoming less popular. People are smoking less because of social pressure, public bans, and high taxes. In the United States, the number of smokers decreased from 21% in 2005 to a record low of 11.5% in 2021.
Tobacco companies have increased prices to try to earn more money, but the long-term trend shows less people smoking.
To adapt to this change, tobacco companies are focusing on smokeless products, such as PMI's IQOS tobacco sticks, snus (tiny bags of tobacco you keep in your mouth), nicotine pouches, and vaping. Some people think these products are healthier or safer than traditional cigarettes.
The smokeless market earned $90 billion in 2022, and it is expected to grow quickly. PMI and BAT think that revenue from smokeless products will grow 14 - 16% annually between 2023 and 2030.
However, governments and regulators are worried about the possible risks of these products. Some worry that tobacco sticks and similar products could create a new generation of people addicted to nicotine. Additionally, these products may contain dangerous chemicals.
Some places, like Singapore and the European Union, have already banned or made restrictions on some of these tobacco products. Also, governments might raise taxes on these products. If they are more expensive, fewer people will buy them.
Vocabulary35 words
- Invest
- To put/pay money into something with the hope of making more money in the future
- Tobacco
- A leafy plant used to make cigarettes;
- Product
- something that is made to be sold or used by people; things you buy in a shop
- Traditional
- usual; normal; established; part of tradition or culture; old-fashioned
- Source
- any thing or place from which something comes from or is obtained; origin; where something comes from; the original; a reference
- Income
- earnings; revenue; money that comes in
- Social pressure
- Feeling influenced by what others think or do in a group; When people you know try to make you do something, even if you don't want to
- Public
- general people, all people, citizens; available for all people; open to everyone
- Ban
- to not allow; to stop; to forbid; prohibit;
- Tax
- money that a government requires people or businesses to pay
- Record
- the most or least ever; the highest level ever; achieved for the first time.
- Earn
- to get something (usually money) because you worked, sold something, or helped someone; to receive
- Trend
- A general direction in which something is developing or changing; course; direction; a general direction of change
- Show
- to prove something or make the truth or existence of something known; confirm; demonstrate; to display; to represent
- Adapt
- to change or modify something to suit/fit a new situation or purpose; to get used to
- Focus on
- to give most of your attention to someone or something
- Smokeless
- Without producing smoke
- Tiny
- very, very small
- Nicotine
- a chemical found in tobacco plants that is addictive and can be harmful to health
- Vape
- Vaping is the “smoking” of a vapor created by an electronic cigarette (e-cigarette); inhale and exhale vapor containing nicotine and flavoring;
- Market
- the field/area/place of trade or business; the buying/selling of a specific product or service; a category of potential buyers
- Billion
- 1,000,000,000 = one-billion
- Expect
- to think something will happen; forecast; predict; suppose
- Revenue
- income; money that comes in; money earned; earnings
- Grow
- To become bigger or increase in size
- Annually
- every year; yearly
- Government
- the group of people who have the authority to make and enforce laws and manage a country or region; the people/group that manage and operate a country
- Regulators
- People who make sure companies follow the rules; Authorities that control and oversee certain activities;
- Risk
- danger; chance of danger; the possibility of danger
- Generation
- a group of people born and living around the same time;
- Addicted
- when you like something very much and want to spend as much time doing it as possible; unable to stop doing something because you enjoy it or think you need it
- Nicotine
- a chemical found in tobacco plants that is addictive and can be harmful to health
- Contain
- to have within; to hold inside; to be part of
- Chemical
- any basic substance that is used in or produced by a reaction involving changes to atoms or molecules
- Restriction
- an official rule that limits what you can do; regulation; limitation
Fill-in-the-blank listening
Play the audio again and fill in the missing words as you listen.
There is _____ news for people who invest in companies that sell tobacco _____, like Philip Morris International (PMI) and British American Tobacco (BAT).
_____ cigarettes used to be a major source of income for tobacco companies, but _____ are becoming less popular. People are _____ less because of social pressure, public bans, and high _____. In the United States, the _____ of smokers decreased from 21% in 2005 to a record low of 11.5% in _____.
Tobacco companies have _____ prices to try to earn more money, but the long-term trend shows less _____ smoking.
To adapt to this change, _____ companies are focusing on smokeless products, such as PMI's IQOS tobacco _____, snus (tiny bags of tobacco you keep in your _____), nicotine pouches, and vaping. Some people think these products are _____ or safer than traditional cigarettes.
The smokeless market earned $_____ billion in 2022, and it is expected to grow quickly. PMI and BAT _____ that revenue from smokeless products will _____14 - 16% annually between 2023 and 2030.
_____, governments and regulators are worried about the possible _____ of these products. Some worry that tobacco sticks and _____ products could create a new generation of people addicted to _____. Additionally, these products may contain _____ chemicals.
Some places, like _____ and the European Union, have already banned or made restrictions _____ some of these tobacco products. Also, _____ might raise taxes on these products. If they are more expensive, _____ people will buy them.
Discussion questions
- What do you think about the decrease in the number of smokers? Is it a positive or negative trend?
- Do you agree with the idea that smokeless products are healthier or safer than traditional cigarettes? Why or why not?
- In your opinion, should governments have the right to ban or restrict certain products for health reasons? Why or why not?
- Do you think social pressure will continue to play a role in reducing smoking? Why or why not?
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