Investors unfazed by standardized packaging

| March 30, 2015

A wave of standardized tobacco packaging regulations threatening to sweep across Europe might be causing panic among global tobacco companies, but investors in those companies seem far from worried, according to a Dow Jones story.

Despite the UK and Ireland this month having passed laws to impose standardized packaging requirements on tobacco products, and despite the fact that France is already discussing similar proposals, tobacco companies have generally outperformed other consumer-goods makers since the start of the year.

Dow Jones noted that shares in Japan Tobacco Inc. and the Imperial Tobacco Group, which together control 85 percent of the $25 billion UK cigarette market and would be most affected by the imposition of standard packaging there, were both up by about 10 percent during the past three months.

Investors were reasoning that decades of anti-tobacco measures in developed countries had barely harmed the investment case for cigarette companies, so why should this one?

Category: Breaking News

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