GREENSBORO, N.C. -- Effective May 10, Lorillard Inc. raised wholesale prices on Newport and its other premium brands by 4.5 cents per pack, which equates to a 2% to 3% price increase, Nik Modi, analyst with UBS Investment Research, New York, said in a note to investors. It raised Old Gold prices by 8 cents per pack, he added.
While both PM USA and Reynolds raised prices last week, Modiwho anticipated the Lorillard increasesaid, "We remind investors that Lorillard took a 4.5-cent price increase previously in February, which was not matched by the industry."
In this [image-nocss] round of price increases, Lorillard left the Maverick brand unchanged, Modi said. "Maverick has been a source of volume share gains for the past several quarters; however, we note that in February, Lorillard raised Maverick pricing by 4.5 cents per pack in February."
Winston-Salem, N.C.-based Reynolds American's R.J. Reynolds Tobacco Co. division notified wholesalers last week that it will charge eight cents a pack more for top-selling Camel, Kool, Winston, Salem and Pall Mall, David Howard, a company spokesperson, told the news agency. Distributors' list prices for Camel Non-Filter, Capri, Carlton, Eclipse, Lucky Strike, More, Now, Tareyton and Vantage will increase by 33 cents a pack, he added.
The company would not explain why it is raising cigarette prices or disclose their average retail prices, Howard said. The increases cover more than 20 brands and varieties, he said.
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The increases take effect May 12, two days after an eight-cent- a-pack increase by Altria Group Inc.'s Philip Morris USA, the largest U.S. producer.
Richmond, Va.-based Altria Group Inc., the largest U.S. tobacco company, also said last week that it plans to raise prices on all 18 of its cigarette brands. Altria's Philip Morris USA division will charge wholesalers eight cents a pack more for Marlboro, Virginia Slims and other brands, David Sylvia, a spokesperson for the company, said. The increase will begin May 10.
The company would not explain why it is raising prices, the first increase since October.
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