December 3, 2010 - RICHMOND, Va. & WINSTON-SALEM, N.C -- Both Altria Group Inc. and Reynolds American Inc. have confirmed an eight-cents-per-pack price increase on all Philip Morris USA and R.J. Reynolds (RJR) cigarette brands. The PM USA increase is effective with shipments on December 6, and the RJR increase kicks in the next day.
The announcements follow on the heels of a six-cents-per-pack price increase from Greensboro, N.C.-based Lorillard, as reported earlier this week. (Lorillard - price increases take effect Tuesday, November 30, 2010..)
"The company periodically evaluates its pricing strategy, and how to most effectively manage its business against marketplace dynamics," Altria spokesperson Greg Mathe told CSP Daily News. "So this pricing increase is a result of that evaluation."
PM USA cigarette brands include Marlboro, Alpine, Basic, Benson & Hedges, Bristol, Cambridge, Chesterfield, Commander, Dave's, English Ovals, Lark, L&M, Merit, Parliament, Players, Saratoga and Virginia Slims.
The increase equates to roughly a 2.2% increase on Marlboro, according to a report from tobacco analyst Nik Modi, UBS Securities LLC, New York.
Altria, Richmond, Va., had increased prices in May of this year, and Marlboro continued to deliver strong retail share results. Marlboro's retail share for the three- and nine-month periods ended Sept. 30 increased 0.7 and 0.8 share points, respectively, versus the prior-year periods.
R.J. Reynolds Tobacco Co., Winston-Salem, N.C., is the second-largest U.S. tobacco company. RJR only has two growth brands, i.e., Camel and Pall Mall. They no longer promote Salem and Kool - two menthol cigarettes that could compete head on with Lorillard's Newport - TW.
August 29, 2010 - U.S. tobacco companies still count on raising cigarette prices not on sales of smokeless products to earn profits..;
July 24, 2010 - Altria, RAI and PMI q2 2010 earnings boosted by higher prices...
Reference: Altria, RJR Join Price HikePhilip Morris, Reynolds cigarettes to rise 8 cents per pack, following Lorillard by Linda Abu-Shalback Zid, CSP (Convenience Store/Petroleum) Daily News, 12/3/2010.