Tobacco

BAT Increases Cigarette Pack Prices

Magnitude higher than expected, especially on smaller brands
British American Tobacco
Photograph: Shutterstock

LONDON — British American Tobacco (BAT) has increased cigarette pack prices for the fourth time this year, according to Goldman Sachs. While the timing of the increase was largely expected, the magnitude of the price increases—especially on smaller brands—came in higher than expected, Bonnie Herzog, managing director at the New York-based investment management firm, said.

BAT is taking a 15-cents-per-pack increase on Newport menthol cigarettes, Camel and Pall Mall Box. It is taking a 25-cents-per-pack increase on Newport non-menthol cigarettes and a 38-cents-per-pack increase on Pall Mall non-filter and Pall Mall Vintage Gold. BAT took several other increases across its brands, but did not raise the price of Lucky Strike, Herzog said.

The London-based tobacco company, which owns Winston-Salem, N.C.-based Reynolds American Inc., the parent company of R.J. Reynolds Tobacco Co., also raised oral tobacco prices. Camel Snus and Grizly Snus, along with three other oral brands, are up 9 to 13 cents a tin. Natural American Spirit roll-you-own (RYO) will see a 40-cents-per-tin increase.

These changes take effect Jan. 2, Herzog said, and follow Altria’s 15-cents-per-pack increase announced in October and BAT’s latest price increase in August.

“Looking ahead, we continue to expect strong net price realization as the industry continues to successfully implement price increases to offset ongoing volume pressures,” Herzog said. “While there is some increased risk of potential downtrading and concerns that manufacturers have less pricing power today… we believe brands like Marlboro with a very loyal customer base and strong/effective promotions should be able to keep those consumers within the franchise.”

Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Multimedia

Exclusive Content

Technology/Services

Drawing Ideas From Global Convenience

How travel can inspire the next big concept to keep a business profitable

Beverages

7 Eye-Catching New Beverages at the NECSEMA 2023 Trade Show

Manufacturers reveal new flavors, varieties and enhancements

Company News

Expanding Equity: How Middle Management Can Move Up

Experts share what causes inequity in leadership roles

Trending

More from our partners