June 3, 2010 - Altria Group Inc., the largest U.S. tobacco company, has announced to its trade customers a list price increase of 10 cents per tin on each of its smokeless brands including the recently launched Copenhagen Long-Cut Wintergreen, according to a note to investors by UBS Investment Research analyst Nik Modi.
Altria raised prices on all 18 of its cigarette brands.
R.J. Reynolds - plans to raise wholesale prices on all its cigarette brands..;
Lorillard - raised prices on Newport and its other premium brands but not Maverick...
The list price on Copenhagen Long-Cut Wintergreen goes from $1.45 to $1.55 (a 6% increase), and the base Copenhagen and Skoal list prices go from $2.39 to $2.49 (4% increases). Husky list prices remained the same at $1.55, he said.
"We believe that share gains in MST [moist smokeless tobacco] remain Altria's priority, as the company has stated on numerous occasions that they are targeting MST growth in-line with the overall category (6% to 7%). Altria's decision to take price—even on their primary share vehicle in Cope WG—could be a sign that overall MST trends have been better than expected," wrote Modi.
Modi added, "We expect Reynolds to follow Altria's pricing actions in smokeless shortly, with Kodiak and Grizzly."
Reynolds American Inc. (RAI), on the very next day Altria announced increases (5/24) is raising prices on moist smokeless tobacco (MST) brands including Kodiak and Grizzly, according to a Dow Jones report. A spokesperson for Winston-Salem, N.C.-based Reynolds American said the company's smokeless tobacco business is increasing prices to wholesalers by 10 cents a can for most of its brands.
The average retail price for a can of Kodiak is $4.43, and $2.77 for Grizzly, the report added. The company does not predict how retail prices will be affected as it sets only the list prices to wholesalers.
"With Reynolds' increase following Altria's, we see the MST pricing environment improving," said Nik Modi of New York City-based UBS Investment Research in a separate note to investors. An earlier note anticipated Reynolds American's increase.
Swedish Match has announced to its trade customers a list price increase of 10 cents per tin on its Red Man and Timber Wolf brands of moist smokeless tobacco (MST), according to a note to investors by Nik Modi, an analyst with UBS Investment Research, New York. "The company did not move on Long Horn, its subprice value offering," Modi wrote.
The price hike follows similar moves by Winston-Salem, N.C.-based Reynolds American Inc. and Richmond, Va.-based Altgria Group Inc.'s Philip Morris USA on some of their MST (as well as cigarette) brands.
Swedish Match has a broad assortment brands in smokefree tobacco, cigars and pipe tobacco, matches and lighters. Some of its brands include General, Red Man, Timber Wolf and Longhorn. Swedish Match U.S. Sales is headquartered in Richmond, Va.
Reference: Altria Adds a Dime Increases wholesale prices on smokeless brands 10 cents, Convenience Store/Petroleum (CSP) Daily News, 5/24/2010; Reynolds Raises MST Prices 10-cent wholesale hike on Kodiak, Grizzly follows Altria's smokeless increase, CSP Daily News, 5/25/2010; Swedish Match Matches Industry Price Hike Announces 10-cent increase on smokeless brands, CSP Daily, 5/28/2010.