Tobacco giant Philip Morris might sell its cigar business, as it works toward a smoke-free future
Cigar sales lit up during the pandemic, but have faded since.
Marlboro owner Philip Morris International is considering a potential sale of its cigar business in the US as the company continues to shift toward its smoke-free products. The tobacco maker is looking for over $1 billion for its cigar unit, per Bloomberg.
Putting out its cigar business isn’t entirely surprising — the division came almost as an add-on when it acquired Zyn maker Swedish Match to focus on smoke-free products, seeing a ~22% dip in cigar shipments since the takeover. Indeed, the US cigar market as a whole has been gently burning down, with sales down ~23% in 2023 relative to the pandemic high of 2021.
Stubbing out
As sales of cigarettes continue to steadily drop, tobacco companies have long been searching for something to light up their sales figures. For Philip Morris, while traditional combustible products still take up a large part of its earnings, the company’s growth is now mainly driven by its smoke-free alternatives like IQOS and Zyn pouches, which bring in about 40% of the company’s total sales as of the latest quarter.
One bright spark in the market is high-end, handmade cigars — a trend which the machine-based cigar maker Philip Morris is on the wrong side of.
