WINSTON-SALEM, N.C. -- Three more tobacco manufacturers have matched Altria’s 8-cent-per-pack list-price increase on key brands, affecting orders billed in mid-March, according to Wells Fargo Securities.
On March 16, Reynolds American Inc., Richmond, Va.; ITG Brands, Greensboro, N.C.; and Liggett Group, Mebane, N.C., followed the lead of Richmond, Va.-based Altria Group Distribution Co., which increased its prices by 8 cents a pack, or 2% to 3%, a day earlier.
Altria’s price increase was done to coincide with a $2-per-pack tax increase in California that will go into effect April 1 and a $1-per-pack tax increase in Pennsylvania that kicked in Aug. 1, 2016, according to Bonnie Herzog, managing director of beverage, tobacco and convenience-store research for Wells Fargo Securities LLC, New York. By total U.S. industry volume, California ranks No. 2 and Pennsylvania No. 4 in cigarette throughput.
Altria is also recovering from a product recall that occurred earlier this year with subsidiary U.S. Smokeless Tobacco Co., Richmond, Va.
These actions, which include Reynolds’ Santa Fe Natural Tobacco Co., are effective for orders billed after March 16 for Reynolds, after March 17 for ITG and after March 20 for Liggett.
The increase does not affect Liggett’s Eagle 20’s brand, according to the company. Herzog said the increases also do not affect the current off-invoice discount values for Newport non-menthol styles.