Altria - Philip Morris to raise cigarette prices (as of March 9, 2009)..

March 7, 2009 - Altria Group Inc., the largest U.S. tobacco company, will raise prices on Marlboro and 17 brands on March 9 ahead of an increase in federal tobacco excise taxes beginning April 1, 2009. Altrias Philip Morris USA will charge distributors 71 cents more for a pack of Marlboro, the top-selling U.S. cigarette, Parliament, Virginia Slims and six other varieties, said Bill Phelps, an Altria spokesman. In addition, the company will raise list prices on Bensen & Hedges and eight other brands by 81 cents a pack.

Altria said the price increases, which will be effective from March 9, are due to costs related to the upcoming raise in federal excise tax on cigarettes to $1 from 39 cents per pack starting April 1, 2009. Last month, Philip Morris also raised prices by about 9 cents per pack. The increase is the second by Philip Morris USA since December and comes before U.S. tobacco excise taxes rise by 62 cents a pack. Philip Morris USA is raising prices again..; Altria/Lorillard cigarette prices increase...

The company plans to cut prices for the smokeless tobacco brands it acquired through its purchase of UST Inc. by 62 cents per tin to compete better in the U.S. tobacco market, which has seen declining volumes amid higher taxes and bans on smoking in public places.

An Altria spokesman said the list price increases on cigarettes are primarily intended to cover the costs of a federal excise tax increase that goes into effect April 1.

Although it is increasing prices on its cigarettes, Altria also plans to cut prices for Copenhagen and Skoal, the smokeless tobacco brands it acquired through its purchase of UST Inc. by 62 cents per tin, according to reports.

Dow Jones reported Altria had been widely expected to cut some smokeless tobacco prices as UST's premium brands faced tough competition from cheaper competing products before the acquisition.

Altria's move to lower smokeless prices could mean fresh competition for Reynolds American Inc., which sells smokeless tobacco products such as popular discount brand Grizzly through its Conwood unit, said Dow Jones. Altria is also discontinuing UST's Rooster smokeless tobacco brand.

The cigarette price increase is far more important than the smokeless price cut, Citigroup noted, as cigarettes contribute about 80 percent of Altria's profit.

Reynolds American Inc., which trails Philip Morris USA by sales, also raised some cigarette prices in December as manufacturers blunt the impact of falling demand from higher taxes and the recession.

Rising Prices Causing People to Re-think Their Lifestyle - This Just Might Be the Time to Eliminate Tobacco From Your Life..

Reference: Altria raising price of cigarettes, Bloomberg News, 3/5/2009; Altria Raises Marlboro Prices in Advance of Federal Tax Hike, Convenience Store Update, 3/7/2009