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Are tobacco makers' profits going up or down? Who smokes/where?

Tobacco giant Altria, the maker of storied brand Marlboro, has made another foray into the world of e-cigarettes with a $2.75bn deal to acquire NJOY. That comes just days after Altria announced it was effectively ditching its stake in Juul — a $12.8bn investment that’s gone up in smoke since the end of 2018.

Altria will be hoping this second bet proves more successful, with 6 NJOY products already fully-approved by the FDA. That was a hurdle Juul struggled — and still struggles — to surmount, eventually leading Altria to swap its investment, most recently valued at just $250 million, for some of the vape company’s IP.

It’s unsurprising that Altria and its big-cig rivals are seeking routes into the burgeoning e-cigarette market, as smoking rates for traditional cigarettes continue to drop. Indeed, in its most recent survey, Gallup found that only 11% of Americans had smoked a tobacco cigarette in the last week, down from 26% just 20 years ago.

Despite that decline, Altria has booked total operating income of more than $103bn since 2012 — giving it plenty of financial firepower to try, once again, to buy its way into the world of e-cigarette pods and pens. That space continues to look like the future, with the latest data suggesting some 15% of 18-29 year-olds already use the alternatives in America.

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