UST, Inc. (principal subsidiaries: U.S. Smokeless Tobacco Company and Ste. Michelle Wine Estates) NOT Worried About New Moist Snuff Entry - Marlboro

January 25, 2008 - Murray Kessler, President, Chief Executive Officer & Director (Q4 2007 Earnings Call - 1/24/2008); Marlboro snuff; when Philip Morris USA announced an Atlanta rollout into our category last August 2007 there was much speculation that the competitive dynamics would shift for both us and the category. While we appreciated investors concern we believe the street had underestimated Copenhagen and Skoal’s brand equities (each worth more than $1 billion at retail - TW). Clearly Marlboro is a great cigarette brand. That said, history clearly shows that it is difficult to extend brands from one category to another particularly in one such as ours where the existing brand equities are so ubiquitous. The Copenhagen and Skoal equities are proving their loyal consumer following and while it is still early our brands are as strong as ever for perspective UST’s premium brands in Atlanta are growing at a 3.4% rate following Marlboro’s launch which is above the national average and category growth has remained strong. We were able to achieve this with a response to their launch that was measured and in no case included lowering prices. Furthermore, this was achieved despite the fact that Marlboro promoted down to a deep discount level of $1.49 a can. Said simply, what we see in the marketplace so far is similar to what has been written by several sell side analyst. So, while again it is early, we agree that this new entry is not a game changer for the snuff category and we remain confident in our ability to keep growing. (UST Inc. Q4 2007 Earnings Call Transcript, January 24, 2008) It has been found that brand loyalty is even stronger than a good promotion. Nearly 7 out of 10 adult consumers will go to another store if their brand is out of stock. (TobaccoWatch,org) Philip Morris USA continues to Stumble in the Smokeless Tobacco Arena Read more...

Ottawa becoming next test market for Snus..

January 25, 2008 - (a wholly owned indirect subsidiary of British American Tobacco(BAT))announces today (1/24/2008)that in late January 2008 Ottawa will be the site of the Company's next test market for its Swedish-style snus smokeless tobacco product. The Company introduced its first snus test market in Edmonton last September. As written by Imperial the most effective way to avoid the risk of long term chronic disease possibly ending death is not to use any tobacco products. (Imperial Tobacco Canada expands harm reduction program with start of SNUS test market in Ottawa, Canadian Business Online, 1/24/2008) Snus will be available starting Monday(1/28/2008) at about 200 stores across Ottawa, one snus pouch has 0.4 grams of tobacco, a tin of 20 pouches is expected to sell for about 80 per cent of the price of a pack of premium cigarettes. The Imperial spokesperson was unable to say how well snus is selling in Edmonton. "Its hard to tell at this point how consumers are reacting to it because it's such a small test market and the level of awareness is relatively low," she said. If snus sales are anything like in the U.S. - they must be poor, e.g, Marlboro SNUS. Health Canada has said snus products are not safe alternatives to cigarettes. The ministry notes it is addictive and can cause serious health problems. ( "Critics raise alarm over smokeless tobacco" by Thulasi Srikanthan, The Ottawa Citizen, 1/25/2008) So why let these tobacco market tests continue?? See related news briefs: October 29, 2007, October 4, 2007, October 4, 2007 September 12, 2007 and May 8, 2007.
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The Altria Group will host a live audio webcast at www.altria.com on January 30

January 24, 2008 - The Altria Group will host a live audio webcast at www.altria.com on January 30 at 13:00 hours Eastern Time to discuss its 2007 results, which will be issued mid-morning of the same day. During the webcast, Mr. Louis C. Camilleri, chairman and chief executive officer, will discuss the company's 2007 results and answer questions from the investment community and news media. (Tobacco Reporter, 1/24/2008) Regarding the contemplated spin-off of Philip Morris International, the Altria Board of Directors anticipates that it will be in a position to finalize its decision and announce the precise timing of the spin-off at its regularly scheduled meeting on January 30, 2008. Altria Board of Directors Announces Intention to Pursue the Spin-Off of Philip Morris International and Increases Regular Quarterly Dividend. Most likely it will be announced that the test marketing of Snus - Taboka Tobaccopaks in Indianapolis has been eliminated - replaced by Marlboro SNUS.

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U.S. House fails to override SCHIP expansion veto..

January 23, 2008 - The House of Representatives failed on Wednesday (1/23/2008)to override a veto of a proposal to expand the State Children's Health Insurance Program (SCHIP) by $35 billion over five years to $60 billion. The vote, 260-to-152, missed the two-thirds majority (15 votes short) needed to override the president's veto. Only one Democrat, Jim Marshall of Georgia, voted against the override. Last year the House failed to override a veto of a very similar bill. An extension of the current SCHIP program has been approved through March 2009. (Ruth Marshall, MarketWatch.com) See related news brief: Congress Sends An Extension of the SCHIP to President Bush.



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Still sucking our youngsters in..

January 23, 2008 - Still sucking our youngsters in.. This is National Non-Smoking Week in Canada. Almost 200,000 Quebecers quit smoking last year but the tobacco companies continue to lure youngsters with gimmicks like flavored cigarettes (tinged with alcohol and food flavors), the province's director of public health, Dr. Alain Poirier said. Consumption of cigars and cigarillos is on the increase among high-school students. In 2006, about one student in five (22 per cent) tried one of these products. The flavored cigarettes can be bought individually or in slickly designed packs of four. A single smoke sells for $1.50 plus tax. The tobacco companies are looking for ways to attract youth, which is perverse, because (by law) they aren't allowed to sell tobacco products to young people. Another product, called snus, which is placed between the gum and upper lip but not chewed or swallowed, is being produced by Imperial Tobacco Canada. Quebec actress Mireille Deyglun, spokeswoman for the anti-smoking week, knows first hand the dangers of tobacco. Her father, brother and two cousins died of lung cancer, and she smoked from the age of 12 before quitting in 1996 at the age of 37. A study by Canadian researchers published last August concluded that the risk of heart attack was equally serious whether tobacco is smoked, chewed or used in a water pipe. ("Still Sucking 'em in" by Sue Montgomery, The Gazette, January 21, 2008) Canada should be concerned with less tobacco smell cigarettes that have been recently introduced. (TobaccoWatch.org) Related news briefs: Quebec Teens Switch from Cigarettes to Cigarillos, Hookah is worse than smoking cigarettes and du Maurier SNUS. Click on image to enlarge..

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