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Breakingviews: CVS gives up smoking

Wednesday, February 05, 2014 - 03:34

Feb. 5 - Antony Currie and Breakingviews columnists explain how stopping tobacco sales shows the U.S. pharmacy and healthcare chain has made a virtue out of a moral and business necessity.

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CVS is giving up smoking enemy that it pretty well organized this morning that Thomas he found in the -- it's announced it was pulling all tobacco products from shelves. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Actually sell tobacco habit rubber you're taking a bit of a financial look at this as well as -- evident looking to some TV seems like so so well I mean what. The announced of course you know Don Draper the protagonist mad men do. When it's firm loses this giant contract with -- lucky strike yeah they'd make a virtue of this necessity I think he writes this giant letter about why I'm quitting tobacco him and then -- while you're so great. The American Heart Association that your client. And you become a sort of I guess an early protagonists of the green or help the company and then spending is great and it may it is in this is so incredibly lost but you've got a president you've got Kathleen Sebelius. You know at the Health and Human Services Department on giving quotes. You've got all the major newspapers have lined up and you know it dutifully wrote stories about what a great deal this was -- -- some already on Twitter and it right it's anyone's credit and nobody broke the embargo it's all great it was so it was really right out of the Don Draper book of a advertising. But there is some virtue and so it's it's it's a virtual moral necessity it's not they lost business -- that you could argue that. That this is declining business anyway. You know people smoking obviously -- partners smokers you are making a virtue that says you are meant to be at temple of health and wellbeing hey you know at about that you. You -- because you know it's DPS didn't have drugstores they also run pharmacy plans for businesses -- -- -- at this cannot forget it definitely about I think it's about a third of their business here and more it's becoming a bigger part of it. So obviously that's the bit of conflict because if you're negotiate with hospitals to take over a business. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- seventeen cents a share they're meant to make about four dollars. Fifty cents us as those that like 3% or something like that now with so if you if you think about it in theory. If you're losing. That seventeen cents times the number of shares outstanding equals 200 million dollars and net income. On the company's current price to earnings ratio of fifteen times in theory. You investor should be -- -- -- for a billion dollars of value from Australia to run but they did they lopped off of billion. So that tells you that they expect that other two billion of values that. Work what it without actually those are you merely help reason yeah that first off cigarette sales declining. I so very seductive so we have so it -- the largest -- decades we school upon increasingly stay exactly as they wouldn't let the company run double and also there's just PR value and -- you know everyone's loving opera -- -- more because like cigarettes have to -- people -- -- by your -- read is exactly Red -- Yeah red vines and dear -- I get the blood organization yes they said there's going to be a type of people of cancer from sugar and believes say. Then go there's maybe that's annexing to -- but at the moment kind of being -- -- -- and any other policies quite yet ready to give up on the news older readers. Thanks to both the rubs it and we'll be back with more breaking east.

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Breakingviews: CVS gives up smoking

Wednesday, February 05, 2014 - 03:34