What's Going on with Tobacco?

[scooterdoo]

It seems like tobacco companies are shutting their doors left and right, people are stockpiling their baccy -- what gives? Is there something going on us noobs should know about?
Possible explanations that don't really make sense to me
1. Less pipe smokers, i.e., companies aren't profitable

Pipe smoking hasn't been big since the 60s. If anything, we're a sort of upswing or stabilization period. If they could handle the early 2000s, they should be able to handle today.
2. Crackdowns on tobacco producers

They've been cracking down on tobacco since the late 80s. Did something change I'm unaware of?
Please fill me in. I'd like to start stockpiling copious amounts of tobacco ASAP. ::

 

[artificialme]

In my opinion, health issue is always the main problem with tobacco industries. As younger generation like to be "aware" of "health", they despise smoking. Yeah, they hate it a lot, but on the other hand, fast food is consumed on daily basis

 

[jaytex1969]

Yes, and yes and probably a few reasons we've not yet thought of.
None of us are seers, but we can all see the writing appearing on the wall.
Pray for the best and prepare for the worst.

 

[haparnold]

I don't want to get into advanced microeconomic theory at the moment, but there are a couple factors driving the somewhat crazy tobacco market, many of which are based more on mass perception than fact.
1. At the end of the day, price of tobacco is determined by the utility smokers are willing to forego in order to posses some leaf. Due to the addictive nature of tobacco, as well as the real or perceived fragility of consumers' ability to procure it, tobacco becomes more highly sought (i.e. expensive/scarce). We smokers believe it's not going to get any easier to get tobacco, so we stockpile. We're collectively assuming the opportunity cost of buying tobacco now is better than the risk of waiting to see if we can get it X years from now. Whether it's true or not has no bearing on the fact that our perception of future scarcity is driving up demand right now.
2. Government interference messes with the natural relationship between supply and demand. When you have regulations like tobacconists in some countries not being able to offer discounts on tobacco, etc. this messes with the market's ability to regulate itself.
3. Government interference is objectively bad. But let's not act like this mass hysteria isn't good news for tobacco producers. Whether it's real or not, the fact that tobacco buyers are stockpiling now for future dry seasons is putting money in the pockets of people who put tobacco in cans for a living.
4. I know we take it for granted that the tobacco industry is under threat (and it is). But the fact that McClelland went out of business doesn't mean the end of times. It's one producer. And the market has been dealing with oppressive regulation for years (my family has been growing dark fired tobacco for a couple hundred years, so we're familiar with Uncle Sam's attempts to discourage baccy production). Tobacco has a strong lobby, and I don't see it going away in our lifetimes (God I hope I'm right on that one).
TL;DR: people think the market is fragile, so they act like the market is fragile. But I don't think "tobacco producers are closing their doors left and right" is an accurate claim.

 

[warren]

Simple economics are causing some labels to disappear. New, proposed regulations in the US will keep new blends from appearing unless the producer has really deep pockets. But, premium and cheap cigars, expensive blends and the so-called "drugstore" blends will be around for those wishing to spend the money.
Nothing stays the same and some who are worried about favored blends disappearing are hoarding. Others are hoarding with the intent of making a financial killing in the future.
But, as long as there is a demand which can provide a profit, tobacco products will be produced. But, in the US and many other countries tobacco use will revert back to where it is only enjoyed by those who can readily afford it. No politician, who enjoys spending other peoples moneys, wants smoking to entirely disappear. The rate setters are still trying to find the ceiling on tobacco and other "sin" taxes. It's also a battle between those wanting everyone to live healthy and those of use who are willing to take a risk for a bit selfish enjoyment.

 

[pylorns]

The new FDA regs (regaurdless of their status) and the lack of good leaf (MCClelland) are what has happened recent. Dunhill is just anti-smoker in general.

 

[scooterdoo]

Thanks for all the responses. haparnold, I think you hit the nail on he head.
@pylorns, can you explain, "Dunhill is just anti-smoker"? What else do they sell???

 

[warren]

dunhill, small "d" sells expensive luxury goods. Dunhill is just a label owned by British American Tobacco (BAT) which wasn't carrying its weight in the BAT stable of blends. An heir of the original Alfred Dunhill still sells pipes and is not anti-smoking by any stretch of the imagine. Those are the "Dunhill White Spot" line of pipes.
Dunhill started off making luxury auto accessories back in the 1800's (the first dashboard mounted clock), added pipes and tobacco, expanded into luxury goods and eventually sold off the luxury goods (the small "d" dunhill brand) to a Swiss company, the tobacco label and production rights to British American Tobacco, the family retained the trademark "white Spot" and now vend "Dunhill White Spot" pipe."

 

[woodsroad]

tobacco companies are shutting their doors left and right

Please elaborate.

 

[jpmcwjr]

Everything that you don't need. Here's a little gem for $3,500, a rollerball pen.

 

[jpmcwjr]

Hardly a mass exodus! And I believe the McClellands closed up shop not because they couldn't get one variety of leaf that was to their standard, nor due to impending FDA interference. They'd been there, done that, and were ready for new things and/or retirement

 

[sablebrush52]

It seems like tobacco companies are shutting their doors left and right, people are stockpiling their baccy -- what gives? Is there something going on us noobs should know about?

Tobacco companies aren't closing their doors right and left. McClelland closed for a couple of reasons. By the McNeil's own statement, the end of beneficial governmental involvement in the form of price supports, coupled with the loss of the auction system, resulted in a loss in quality of the leaf they felt they needed to obtain in order to continue. Plus, the heavy physical labor involved in producing blends of the quality that McClelland was known for was taking its toll. They had a 40 year run and rather than sell the brand to someone who wouldn't maintain their standard, they decided to close their operation and retire. They earned it.
BAT, which owns the Dunhill pipe tobacco brands, decided to stop making the blends as it didn't fit their business planning. There is a chance that the blends will be made under another name.
FDA Rules, crafted with the help of Big Tobacco, will require all blends introduced after Feb 15th, 2007, to undergo their vaguely worded and potentially expensive Deeming process in order to continue to be available for sale. Originally the deadline was August 8th of this year, but it was pushed back to 2021-22 so that the FDA could conduct some studies they deemed necessary to complete before releasing the guillotine. Cigarette companies can afford the cost of the deeming process while most pipe tobacco companies can't because our market is too small. Pipe tobacco is collateral damage in a move by BT to give themselves a monopoly on the nascent vaping market.
So people are focusing on buying and hoarding while these blends are still available to buy. Pre Feb 15 2007 blends will still be available. At least for now.
There's been a change in the mood of the community since the FDA Rules were announced. There have been some shortages in the delivery of some products. Whether that has to do with greater demand or issues with obtaining the components for making some sought after blends, I do not know.
China is a developing market for pipes and pipe tobaccos and their demands may play a role in where goods are going.
Before April (or was it May?) of 2016 the mood was high. New blends were coming out constantly and the feeling was that we were in a "golden age". Now people feel that the party is over.

 

[mso489]

sable' has it about right, insofar as I know. The upside includes these points: Thanks to the internet, the variety and quality of pipe blends has probably never been better, nor in most of the U.S. more reasonably priced corrected for inflation. This could change fairly quickly, but it is a golden age of sorts now. Not nearly as many pipes are made and sold as in the 50's and 60's, but again because of the internet, the artisan pipe market and the estate pipe market have never been as strong. So enjoy the good aspects while you can, and cope with the downside as you can.

 

[PaulTheScandinavian]

Mr.Artificialme, The Younger Generation despise smoking' thing was a news to me,In my youth(I'm 52)this all was opposite, at least now I'm updated on the current mood of young adults' Thank You and Greets, Paul

 

[briarbuck]

China is a developing market for pipes and pipe tobaccos and their demands may play a role in where goods are going.

This point does not get enough attention imho.

 

[arvetus]

I hardly see tobacco going away, especially with ...ahem...another natural smokable herb... being well on its way to becoming legal in most of the country. Almost half the country has laws legalizing this herb and many other states are getting on board.

In light of that, I don't see tobacco going away. It has been a big money maker for the fed since they started regulations on it and thankfully for pipe smokers, cigarettes have the most regulation.

Granted...tobacco and "this herb" are currently a part of two different governmental agencies. Wouldn't that be ironic if they switched? That would be like wiping before you poop...wouldn't make a bit of sense.
My oldest daughter will be 15 in October and has been a part of the "Say What" campaign here in TX in recent years. She was rather upset when she saw my pipe tobacco supply come in, so we had quite a long discussion on it. I had her tell me what she has learned in her conferences and then I asked her what kind of tobacco it was they were discussing. All of it was pertaining to cigarettes and e-cigs.

Then I asked that since she knows and sees me smoking cigars occasionally if she had a problem with me smoking cigars when we are celebrating a special event with friends...like when someone has a baby, at someone's wedding, on the 4th of July celebrating America's independence, etc. Her answer was, "well, no." So we had a long discussion about the differences between pipes/cigars and cigarettes, but one thing we also had a discussion about was how it is not right to regulate someone else's freedom. And while it's A GOOD THING that she should do what she can to PREVENT kids from starting cigarettes (easiest to smoke and get access to) in the first place, it's not right to get full grown adults to stop by hammering them with health risks. Most adults that smoke know the risks, but either don't want to stop or can't. In addition, while they're not completely out of the woods, pipes and cigars are playing in a different ball park and don't have the same risks, nor is the tobacco quality even in the same category.
It's tricky business, but even in light of all the campaigning against tobacco, and with all these cities passing "smoke free" ordinances, I don't see tobacco going away anytime soon.

 

[warren]

The "Fed" spent billions of dollars subsidizing tobacco before lesser government bodies starting taxing it. The "Feds" promoted tobacco then, the state and local governments started taxing products made from the "weed" the Feds were promoting.
Marijuana and tobacco are two entirely different substances, obviously. To use one to justify the other does a disservice to tobacco and, dare I say, marijuana. It's an old debate tactic which furthers the discussion on tobacco, not! An easy comparison of course. Perhaps too easy. Certainly not something for a pipe and tobacco discussion board.
My last observation is that children parenting adults is one of the more successful tactics of the "anti-smoker" side of the debate. The only response an adult has is that of, "I like it. I know the risks. And, I'm selfish and stubborn with respect to my chosen vice." That was my response the first time my daughter brought home the "Smoking is bad for you!" observation. She was absolutely correct and there was no other response. I'll be using the same response when my grandson makes the same observation in a few years.

 

[olkofri]

"Thou shalt not lecture, much less command, your elders and betters!" is my response.

 

[arvetus]

Well, in her defense, I remember doing the same when I was a kid...before I realized what freedom truly was, and what it was like to be an adult. It's weird how that works. But we did have a good discussion on it. My freedom ends when it interferes with yours.
As far as MJ vs baccy, you're probably right. I have never done the former, so I would hardly be one to talk about it, so I probably ought not to. I guess trying to make the comparison was too easy, but you're also right in that this is probably not the place to discuss it. My bad on that...

 

[warren]

No harm. No foul. Just trying to get you to take your game to a higher level. ::