C-store update, Pall Mall/Maverick, more SNUS images, etc...

May 4, 2009

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Lorillard is complaining about the reduced price of R.J Reynolds (RJR) Pall Mall and Doral. They say with their contract Maverick with the c-store their discount product has to be within 30 cents of the lowest priced cigarettes. R.J. Reynolds has an Every Day Low Contract with the c-store that allows them to always have the lowest price. The owner corrected the problem by increasing the price of Pall Mall (the only other RJR investment (growth) product besides Camel) from $3.15 a pack. changed price to $3.59 then changed the price of Maverick to $3.89 within 30-cents of the lowest price cigarette.

RJR has promoted Pall Mall for the last couple of years by using what they call pulse promotion which means they promote it for a couple of months, and generate high levels of trial. It is claimed that Pall Mall has more puffs than a premium cigarette. So, it is longer lasting and it is high quality, and Pall Mall also has a premium heritage name and positioning. It is interesting to note in 1960 Pall Mall was the most popular cigarette in the U.S. because it was the first to introduce the 100mm cigarettes providing the smoker a few extra puffs. (Reynolds American Inc. Q1 2009 Earnings Call Transcript, Seeking Alpha, April 29, 2009..)

Have you noticed in c-stores RJR support brands (e.g., Winston, Doral, Kool, Salem) are not displayed - you only see their investment brands: Camel and Pall Mall. From the c-store news brief of February 14, 2009 - the R.J. Reynolds salesperson hides the shelf containing Kool cigarettes behind a sign advertising Pall Mall.

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Marlboro B1G1F price raised from $5.29 ------> $6.99

PM promotion starting May 1st.. will give c-store owner a $1.00 off on Marlboro and then they want owner to reduce the retail price $1.00. RJR expects other tobacco companies to complain - if this happens the promotion will be canceled..

PM reducing price of Basic - people had been complaining - no longer considered price value/discount priced too high.. price to be reduced 15 cents from $4.55 to $4.35 a pack..

Camel SNUS pics..

insert (front and back) from STYLE Weekly - Richmond, Virginia, April 22, 2009..

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Maxim Magazine March 2009..

Back in December 2008 we reported that Philip Morris USA (PM) gave this one c-store a $100 per quarter if the owner devoted an entire shelf to Black & Mild Cigar Selections. This arrangement was fine with the PM salesperson but her supervisor has canceled the agreement because he felt the shelf was not at eye level making harder for the customers to see.

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In North Carolina there is a rule that a customer can only purchase five cartons of cigarettes at any time to reduce illegal cigarette sales. A newspaper ad for cigarettes (image below) - note that for all the other cartons it states limit of five carton but for Marlboro Lights it states limit of 10 cartons. We are now trying to find out more about the 5-carton rule .

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Grizzly pouches - new product, a user comment..
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Previous news brief..