A spokesperson for Winston-Salem, N.C.-based Reynolds American said the company's smokeless tobacco business is increasing prices to wholesalers by 10 cents a can for most of its brands.
The average retail price for a can of Kodiak is $4.43, and $2.77 for Grizzly, the report added. The company does not predict how retail prices will be affected as it sets only the list prices to wholesalers.
The [image-nocss] price hike comes after a similar increase by Altria Group Inc.'s moist smokeless tobacco unit.
Richmond, Va.-based Altria's Philip Morris USA (PM USA) announced to its trade customers late last week a list price increase of 10 cents per tin on each of its moist smokeless brands including the recently launched Copenhagen Long-Cut Wintergreen. (Click here for previous CSP Daily News coverage.)
"With Reynolds' increase following Altria's, we see the MST pricing environment improving," said Nik Modi of New York City-based UBS Investment Research in a separate note to investors. An earlier note anticipated Reynolds American's increase.
"We believe the key to tobacco stocks working is pricing power," he added.
Altria, Reynolds American and Greensboro, N.C.-based Lorillard Inc. all announced increases in their wholesale cigarette prices earlier this month. (Click here for previous coverage.)
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