The Biggest Threat to Big Tobacco

In today's edition, analyst Austin Smith discusses what he sees as the biggest threat to big tobacco now, and it's coming from a relatively small market: Australia. The country has recently enacted strict packaging requirements on cigarettes sold in the nation. The law stipulates that tobacco products be sold in the same olive-green packaging with graphic anti-smoking images on the wrapper. This threatens to lower cigarette prices there by as much as 19% by removing many tobacco corporations' biggest competitive advantage -- their brand strength. On a more macro level, if this legislation is effective in reducing smoking rates in Australia, it could be quickly adopted by other nations.

Despite these risks, the international market is simply more favorable to many American firms than the regulation- and taxation-ridden domestic one. That's why our analysts uncovered "3 American Companies Set to Dominate the World." You can learn more about these three heavyweights going abroad in a big way by clicking here now. Fool on!

At the time thisarticle was published Austin Smith owns shares of Philip Morris International but no other company mentioned here. Motley Fool newsletter services recommend Philip Morris International. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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