Smoking set to "disappear" in many "developed" countries by 2050

The Telegraph Smoking could “virtually disappear” in Britain within half a century, according to research by Citigroup. By Rachel Cooper

With quitting smoking on top of many a list of new year's resolutions, the broker has considered what a decline in smoking means for the tobacco industry.

The habit has been on the wane since the 1960s, when just over half of adults in Britain smoked. With people becoming more conscious of the health risks associated with smoking and the introduction of the smoking ban in 2007, that figure had dropped to a fifth by 2008.

“The percentage of smokers is declining across the developed world, and the declines are more or less in a straight line in most markets,” said analysts.

“If these trends continue, then by 2050, many important tobacco markets will have gone to zero smoking.”

But Citigroup stressed that these were “extremely long-term” trends and did not justify any action as yet, adding that pricing increases will continue to drive profit growth for tobacco companies until about 2020.

However, they did point to other more imminent challenges, including the advent of plain packaging.

Andrew Lansley, the Health Secretary, said late last year that the government was considering plans to sell cigarettes in plain packaging in an attempt to deter children from taking up the habit.

Citigroup analysts said they believed generic packaging was likely in Australia, but unlikely in Europe. They added that in their view, it would make "surprisingly little difference to smoking rates or profits".

"We don’t believe smokers are attracted to smoking by the packs because graphic health warnings already make them look revolting. Furthermore plenty of drugs are bought without branded packaging," said the broker.

Citigroup downgraded their rating on Imperial Tobacco, British American Tobacco and Philip Morris International to "hold" from "buy". But stressed they were not turning "ultra-bearish" on the sector.