Questor share tip: Hold British American Tobacco after good run However, the performance of each was mixed. Lucky Strike, for example, saw volumes slide 9pc, with increases in Germany, Poland and Italy, more than offset by market declines in Spain. Conversely, Pall Mall volumes rose 9pc, largely as a result of growth in Pakistan, Chile, Canada and Italy, which were partially offset by declines in Uzbekistan and Spain. The total number of cigarettes sold across the group fell by 3.7pc to 160bn sticks, but this was offset by price increases of 8.7pc. The pricing represents a better-than-expected performance, and was the main positive in the statement. The volume of cigarettes sold also had a strong comparator, as the global brand saw volumes rise 6pc in the first three months of last year. Also, volume in the quarter was hit by an excise tax increase in Brazil late last year, BAT's largest market by sales. Of course, Smoking is in decline in Western nations, which could be a threat to the sector's performance over the next couple of decades. Indeed, analysts at Citigroup said in 2011 that smoking could all but be eliminated from the UK by 2050. This total elimination seems unlikely, but BATS management have one eye on the future and are investing in tobacco alternatives. Late last year, Nicandro Durante, BAT's chief executive, said the group was looking into "non-combustible" cigarettes which heat the leaf rather than burning, as well as nicotine inhalers. Mr Durante predicts the market could be worth "billions." After yesterday's post-update surge, BAT shares are trading on a 2013 earnings multiple of 15.7, falling to 14.4. The prospective yield is 4.2pc, rising to 4.6pc. City analysts are roughly split half and half with buy and hold ratings. Questor has had a buy rating on the shares for some time, but now thinks they are a hold at these levels.