Japan Tobacco Bringing Low-Priced Cigarette Brand to U.S.

Success of test in the Carolinas will determine whether to launch product nationally

Japan Tobacco's LD cigarettes

GENEVA -- Japan Tobacco Inc. (JTI) is bringing a new, low-priced cigarette brand to the United States, according to a report by The Wall Street Journal. JTI spokesperson Michelle Maron confirmed the brand's U.S. introduction for CSP Daily News.

The $2.81-a-pack price tag for LD cigarettes compares with Marlboro at $4.92 and puts it in position to challenge discount brands L&M at $3.69 and Pall Mall at $3.49, said the report.

The red, blue, green and silver packs of cigarettes bearing the LD logo are part of a plan to give the world’s second-largest tobacco company a toehold in the lucrative U.S. market, the report said. Almost all of JTI’s roughly $22 billion in sales come from outside the United States.

LD in March became the first global brand introduced by the Geneva-based company in the United States. The company told the newspaper that it is testing the cigarette’s appeal in North Carolina and South Carolina and, depending on its performance, will launch the brand nationwide as early as next year with 10 style variations.

A JTI spokesperson told the Journal that the company “will continue to make appropriate investments for a company of our size, 0.34% share of the cigarette market” in the United States.

JTI is the market-share leader in the United Kingdom and Japan with brands including Winston and Camel, which it bought the non-U.S. rights to in 1999 for $7.8 billion. It has a small presence in the United States with low-price brands Waves and Wings. Launched in Russia in 1999, LD accounted for nearly 50 billion of the more than 390 billion cigarettes JTI sold last year.

JTI also is making a U.S. push into electronic cigarettes, said the report. Since acquiring Logic in July 2015, the company has invested to update Logic’s packaging, added flavors such as cherry and vanilla and increased its staff to about 100 employees from about 20 when it was acquired last year.

Logic’s expanded sales team has helped it add distribution west of the Mississippi, turning Logic into a national e-cig brand, the report said, citing e-cigarette unit president Miguel Martin.

JT International U.S.A. Inc. is based in Teaneck, N.J.