>>Why? I understand military hardware, gambling and spirits, but is a demand
growth for tobacco products? <<
Not really; the growth in Asia just offsets the freefall in demand in the developed world, smoking bans in Ireland, whatever else etc, and net net, it's pretty flat. But the great thing about baccy is that rain or shine, famine or feast, boom or bust, the demand is roughly the same from year to year[1]. In the long term, it's a declining market. But it doesn't decline any faster just because the economy's in the toilet, whereas almost everything else does. Alcoholic beverages are pretty good for this too. Therefore, if you're a fund manager and you're getting a bit worried about the state of the world, you look at your portfolio and think "hmmm I could do with a few booze 'n' fags stocks in here". When the market as a whole is going down, baccy and booze is your only man. This does not constitute investment advice.
best, dd
[1] This also means that tobacco producers are not very susceptible to the sorts of supply chain bottlenecks that plague lots of other companies. The demand for cigarettes is also not very seasonal, so you don't have to maintain a big margin between regular operating capacity and peak. And these days, not so much messing about over advertising campaigns either. This is useful as it frees up lots of executive time for fighting lawsuits and lobbying the government.
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