MST Update: Pricing Picks Up
Published in CSP Daily News
Altria, Reynolds American increase prices on moist smokeless tobacco
RICHMOND, Va. & WINSTON-SALEM, N.C. -- Moist smokeless tobacco (MST) products from Reynolds American Inc. and Altria Group Inc. are getting a bump up in list pricing this month.
Altria told wholesalers last week that its U.S. Smokeless Tobacco Co. is taking prices up 10 cents per can on Copenhagen, Skoal, Cope, Husky and Red Seal MST products.
Increases will also affect the company's snus products, with Skoal Snus seeing an increase of 31 cents per can effective Sunday, May 22, and Marlboro Snus Tins increasing 31 cents per tin effective Wednesday, May 18. (Products [image-nocss] marked for promotions that are affected include Skoal Snus with 50 cents off per can, and Red Seal with 75 cents off per can.)
"U.S. Smokeless Tobacco periodically evaluates strategy to most effectively manage its business, in light of marketplace dynamics to deliver value to adult consumers," Altria spokesperson Greg Mathe told CSP Daily News.
And David Howard, Reynolds spokesperson, confirmed that the company had a list price increase of 10 cents a can on its Grizzly, Kodiak, Hawken and Cougar products, as well as Camel Snus--which went into effect, Monday, May 16. He added, "How a list price increase might affect the price at retail, I can't speculate, because we do not set the price at retail. As for anything else, it's our policy that we do not comment on pricing strategies."
The Reynolds increase was in line with a note from Nik Modi, analyst with UBS Investment Research, New York, to investors, in which he said: "With Altria's move, we expect other MST players like Reynolds American and Swedish Match to follow the company's move with similar price increases of their own." (Swedish Match could not be reached by press time.)
Richmond, Va.-based Altria directly or indirectly owns 100% of each of Philip Morris USA, U.S. Smokeless Tobacco Co. LLC, John Middleton Co., Ste. Michelle Wine Estates Ltd. and Philip Morris Capital Corp. Altria holds a continuing economic and voting interest in SABMiller plc.
Winston-Salem, N.C.-based Reynolds American Inc. is the parent company of R.J. Reynolds Tobacco Co., American Snuff Co. LLC, Santa Fe Natural Tobacco Co. Inc. and Niconovum AB.