Murray Kessler leaving Altria at the end of June 2009

June 29, 2009 - Altria Group Inc. said on Friday that Murray S. Kessler, now a vice-chair at Altria and formerly the chairman and CEO of smokeless tobacco company UST Inc., will leave the company at the end of June 2009 after overseeing key elements of UST’s integration into Altria.

Richmond-based Altria completed its $10.4 billion acquisition of UST in January, giving it market-leading brands such as Skoal and Copenhagen.

Since then, Altria said it has identified an additional $50 million in integration cost savings, bringing its savings to about $300 million by 2011. The company also consolidated its sales force to market its products.

Following Kessler’s departure, Dan Butler, president of U.S. Smokeless Tobacco Co., will report to Craig Johnson, executive vice president of Altria. Within UST Inc., Prior to moving to Altria Butler was President of USSTC (United States Smokeless Tobacco Company) - a subsidiary of UST, Inc. USSTC was the leading producer and marketer of moist smokeless tobacco products.

Altria has consolidated the U.S. Smokeless Tobacco Brands and Philip Morris USA (PM USA) sales forces into a new entity, the Altria Sales & Distribution Inc., which now services all of Altria's tobacco businesses with an organization approximately the same size as PM USA's sales force prior to the acquisition.

Murray Kessler had been very disappointed in the total performance of whether -- they call it Snus or we call it spit-free. We've been testing this thing now for seven years (Revel). The newer entrance [entrees], if you go back, is now, in original markets, is over two years, and it is not gaining the traction, given the level of investment that's been put there. Kessler has stated in the past that "Nine out of 10 smokers that try smokeless still reject the product." Mr.Butler has alos been very disappointed with the progress of the SNUS segment in total. The entire segment itself has gained very little traction, and we had plans to be more aggressive. Frankly, we are revisiting those because the size of this market and how slowly it's developing -- it's so tiny and taking so long to gain any traction. (UST, Inc. Executives Very Disappointed in Sales of the Entire SNUS Segment..; UST, Inc. Don't view SNUS as something that has a major impact on our core business.; Nine Out of Ten Smokers Who Try Smokeless Still Reject the Product...)

References: Altria announces departure of UST executive by AP, Richmond Times Dispatch, 6/26/2009; Altria Announces Departure of Kessler UST integration progressing smoothly, company says, Convenience Store / Petroluem (CSP) Daily News, 6/29/2009.