Despite the fact that shares of the world's top tobacco companies reached record highs in recent weeks, AXA, one of the world's biggest insurers, has decided to sell all of its assets in the tobacco industry. Over $2 billion in assets will be divested, and AXA will cease all further investment. This huge announcement follows new tobacco laws in the United Kingdom regarding uniform packaging, as well as large graphical health warnings that will go into effect in less than a year. With investors retracting funds and government laws emphasizing health concerns, will this mark the beginning of the end for the tobacco industry? 

Tobacco is the leading cause of preventable death. Today, tobacco kills more than six million people per year, a figure that is expected to rise to eight million by 2030. Calpers, a big United States pension fund, withdrew all investment back in 2001, but AXA is the first UK company to pull out of the sector. Cary Adams, CEO of the Union for International Cancer Control, stated, "We need companies like AXA to signal that investing in an industry which kills its customers is simply the wrong thing to do." Now, the question is whether other major shareholders will follow in AXA's footsteps. For AXA, its divestment in the industry is an attempt to support government efforts to reduce the number of people who smoke. Thomas Buberl, Deputy Chief Executive Officer of AXA, commented, “As a major investor and leading health insurer, the AXA Group wants to be part of the solution, and our hope is that others in our industry will do the same."

Preceding AXA's divestment announcement, the UK parliament voted to ban branding on cigarette packs, as well as display large health concerns. Despite efforts made by cigarette companies to challenge the new law, all aspects of the law will go into effect immediately, with a year long grace period to sell current stock. Jane Ellison MP, public health minister commented on the issue, stating, “This is a victory for a generation that will grow up smoke-free. Standardized packaging will reduce smoking rates and save lives, which will always be a top priority for this government.” With smoking rates already at their lowest in history, these efforts in both the private and public sector could be enough to drive the industry into extinction.

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