PM USA Price Hikes
Following Lorillard, Altria increases per-pack price on all cigarette brands
RICHMOND, Va. -- Altria Group Inc.'s Philip Morris USA will increase the per-pack price on all PM USA cigarette brands by nine cents effective July 8, company spokesperson Greg Mathe confirmed for CSP Daily News.
The move--as predicted by New York City-based Wells Fargo Securities LLC managing director of beverage, tobacco and consumer research Bonnie Herzog--follows Lorillard Inc.'s increase of five cents per pack on its Newport Menthol brand, 11 cents per pack on its Newport Non-Menthol brand and eight cents per pack on its other brands, with no increase on its [image-nocss] Maverick brand.
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In a subsequent research note, Herzog said, "RJ Reynolds (RAI) has reduced its off invoice promotions, effectively increasing its cigarette prices in line with Lorillard and PM USA."
She wrote, "These per pack price increases represent around a 3% to 5% manufacturer list price increase, in-line with our expectations. Overall, these cigarette price increases are positive and the industry still does have pricing power, in our view. Given that consumption will likely continue to decline in the mid-single digit range, pricing is necessary to drive top-line growth."
Richmond, Va.-based Altria directly or indirectly owns 100% of each of Philip Morris USA Inc. (PM USA), U.S. Smokeless Tobacco Co. LLC (USSTC), John Middleton Co. (Middleton), Ste. Michelle Wine Estates Ltd. (Ste. Michelle) and PMCC.
The brand portfolios of Altria's tobacco operating companies include Marlboro, Copenhagen, Skoal and Black & Mild Other cigarette brands include Basic, Chesterfield, Lark, L&M, Parliament and Virginia Slims.