Is British American Tobacco (BAT), that redoubtable peddler of cigarettes, stacking up customers for its next-generation products fast enough? BAT’s revenue and profit line still smoulder reassuringly from cigarette sales. Even though volumes are steadily declining, BAT has enormous pricing power in its brands — understandable, considering the addictive nature of nicotine. I am not an ardent antismoker, even if my lungs heave these days when I smell cigarette smoke. But I certainly have no doubt that cigarette sales will diminish until traditional tobacco has little more than a cult following — which might be mainly spotty teenagers lighting up a rebellious flame.

Will that take five years? Probably not — and especially not in emerging markets, where the habit is not frowned upon quite so severely as it is by more health-conscious societies. But in another 10 years, I reckon cigarette smoking will be extremely marginalised and even pricing power will not be able to compensate ...

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