March 24, 2011 - A controversial new Altria tobacco contract that would impose price ceilings on what operators could charge is leaving a foul taste for retailers. Numerous retailers, from independents to some of the country's largest convenience-store chains, are criticizing Altria's Marlboro Leadership Price (MLP) Option.
"We feel philosophically when a supplier tries to dictate how much you can sell a product for, it's inherently not a good policy," said Steve Loehr, vice president of operations support at Kwik Trip, operator of more than 400 stores in Wisconsin, Minnesota and Iowa. "It's not acceptable to us. We're not going to go with the program," Loehr told CSP Daily News.
The Marlboro Leadership Price (MLP) option, available to higher-tier Philip Morris USA retailers, has caused a stir among tobacco retailers--with many unhappy about the price ceilings it sets.
Greg Mathe, spokesperson for Altria Group Inc., and Miguel Martin, senior vice president and general manager of Altria Sales & Distribution, took some time out to discuss the controversial contract option with CSP Daily News companion newsletter Tobacco E-News.
Considering the current economic environment, we are aware that adult smokers are changing why they choose a store to purchase cigarettes. And most adult smokers have stated that the lowest price on cigarettes was the most important factor in choosing a store.
The MLP option is meant to help them meet adult smoker's expectations and help keep Marlboro competitive in the marketplace. Our stated objective of this program is pretty straightforward: To reward retailers who offer a competitive Marlboro single-pack price to adult smokers.
For more - see references..
References: Marlboro's Contract Cap Industry upset by Altria's latest program, "recommended maximum price" by Linda Abu-Shalback Zid & Mitch Morrison, CSP Daily News, 3/18/2011; Altria Talks MLP Execs respond to retailer concerns about program's "recommended maximum" Marlboro price by Linda Abu-Shalback Zid, CSP Daily News, 3/24/2011.