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Tobacco farmers losing contracts

May 30, 2010 | About:

In afternoon trading Friday, cigarette and tobacco shares were relative laggards, down on the day by 3.2%. Helping drag down the group were shares of Universal, down 15.7%, and Alliance One International, lower by 8.4% on the day.

Tobacco companies are cutting contracts with tobacco farmers due to lower U.S. cigarette sales and higher taxes. U.S. farmers are beginning to see more competition from tobacco growers overseas.


Rating: 3.5/5 (4 votes)


Superguru - 7 years ago    Report SPAM
Thats sad to hear. Hopefully Tabacco growers here can move to growing something else.

Does that mean industry consolidation may be on horizon with merger or buyouts involving UVV and/or AOI?

Is thats why Seth is owning AOI?
Expectingrain - 7 years ago    Report SPAM
This won't affect contracts until 2012 and its uncertain what will happen even then. I am *very* interested in UVV in the 30s. With the tiny size of both AOI and UVV, it would be very easy for a large tobacco company to vertically integrate. Will keep an eye on the situation as it unfolds.

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