C-Store Update - Philip Morris USA to introduce another Marlboro menthol cigarette..

May 10, 2009 - Last Tuesday night (May 5, 2009) Senator Edward Kennedy introduced legislation similar to a bill (H.R.1256 Family Smoking Prevention and Tobacco Control Act)already passed by the House that gives the FDA the power to regulate tobacco products. Senate action on this legislation should be this month or in June.
Kennedy's bill is almost certain to pass and then be signed into law by the president.

As we know, Altria partnered with the 'Campaign for Tobacco Free Kids' to write the bill that has seen lots of concessions. We worry that the legislation will be flawed because the Altria, the biggest player in the tobacco industry has been directly involved in writing the bill that regulates their industry. As Senator Michael B. Enzi (R-WY) has pointed out, "Poison peddlers shouldn’t get to decide how we as responsible legislators fight the war against their deadly products."

The bill has been dubbed by Fortune Magazine the "Altria Earnings Protection Act." The true motivation behind the FDA tobacco regulation bill may be a big company’s desire to kill off its smaller competitors. "In short, it will lock in Altria's dominant position in the market." (U.S. - FDA tobacco regulation or a lock in Altria's dominant position in the market...)

It seems like Altria has already started to put this plan in motion..

Cigarette makers have found it extremely difficult to take menthol cigarette market share away from Lorillard's . While fewer people are smoking, menthols' share of the overall cigarette market has grown steadily for several years. In 2000 about 26.5% of smokers were menthol smokers, in 2006 it was at 28.5% and it is expected the menthol category will continue to grow. David Adelman cigarette analyst at Morgan Stanley points out that Newport, which has a 10% share of the U.S. tobacco market, is the choice of roughly 17% of new smokers, Newport dominates the menthol category, with a 34% market share (while accounting for 90% of Lorillard's sales volume and nearly all its profit). ( Will Lorillard Meet Its Match?, Stocks by Andrew Bary, Barron's, 3/25/2009) Comparison - percent menthol market share.. Current Newport ad Maxim Magazine - March 2009. More on the growth of Newport Cigarettes.

Philip Morris USA will introduce a new menthol cigarette in June 2009..

During the promotion period, i.e., June 17, 2009 - July 26, 2009, the introductory price will be $2 off per pack and $20 off per carton. The new Marlboro Blend No. 54 will be supported by a Direct Mail campaign to smokers 21+ on PM's mailing list and Retail Look - a variety of point-of-sale will [exact text] be available to create awareness in your store for Marlboro Blend No. 54.

Benefits to C-store owner: Marlboro Blend No. 54 can help build profits from sales in your store; well executed promotional support may help increase foot traffic in your store and build loyalty with your Adult Smokers; Qualified Retail Leaders participants may receive Retail Leaders merchandising payments on qualified Marlboro Blend No. 54 purchases.





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