China Tobacco miscalculated.

They originally thought tobacco was a necessity, and even if retail prices rose by 40-50%, you'd have no choice. They never expected that rural areas would start rolling their own cigarettes, young people would switch to e-cigarettes or stop pursuing premium brands. What used to sell out during the New Year now can't be sold out each year. This demographic is price-sensitive. Once they get used to making their own, they're gone for good.

Currently, many tobacco and liquor stores are going under. The ones that remain are barely scraping by.