Altria Takes First Cigarette List Price Hike of 2024

The changes for several brands go into effect on Jan. 14.
Melissa Kress
Altria logo

RICHMOND, Va. — Altria Group Inc. is increasing the list price for several of its cigarette brands. 

According to Bonnie Herzog, senior financial analyst at Goldman Sachs, the company is raising the list price on Marlboro (primarily nonmenthol), Basic, L&M and L&M Simple Tobacco by 15 cents per pack. That is roughly 2% to 3%. 

Additionally, the company is implementing a 20-cents-per-pack increase on Marlboro Mainline Menthol & Marlboro 72s Menthol, Benson & Hedges, Merit, Nat's, Parliament and Virginia Slims.

This follows Altria's previously announced Marlboro Differential List Price Initiative, which is designed to accommodate different list prices for Marlboro cigarettes based on specific Marlboro SKU groupings. 

The changes go into effect on Jan. 14 and follows Altria's four increases in 2023 — the last in October. 

"Altria's price increase today is a bit of a surprise considering its four cigarette list prices last year, suggesting to us that volume pressures continue. Having said that, we believe Altria has become more sophisticated and targeted with its pricing strategies as well as promotional spending to offset these more frequent list price increases, especially for price sensitive consumers," Herzog said.

[Read more: British American Tobacco Hikes Cigarette List Prices]

"Altria's net price realization remains very robust, up high single digits over the last few years; we expect this to broadly continue despite the pressures on the low-income consumer, increased risk from downtrading pressures and a widening relative price gap between Marlboro and the lowest effective cigarette on the market to 43% in the third quarter of 2023 (vs. the 30% historical average). We will be watching to see whether deep discount cigarette manufacturers also move on price. If they don’t, the relative price gap could widen further," Herzog noted. 

She added Goldman Sachs expects strong net price realization for the industry given manufacturers’ strong pricing power. "While there is some increased risk of potential downtrading (especially given pressures on the consumer), 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 — for example, by leveraging Marlboro Special Select," Herzog said. 

Based in Richmond, Altria's wholly owned subsidiaries include leading manufacturers of both combustible and smoke-free products. In combustibles, it owns Philip Morris USA Inc. and John Middleton Co. Its smoke-free portfolio includes ownership of U.S. Smokeless Tobacco Co. LLC, Helix Innovations LLC and NJOY LLC.

Additionally, Altria has a majority-owned joint venture, Horizon Innovations LLC, for the U.S. marketing and commercialization of heated tobacco stick products and, through a separate agreement, has the exclusive U.S. commercialization rights to the IQOS Tobacco Heating System and Marlboro HeatSticks through April 2024.

The company's equity investments include Anheuser-Busch InBev SA/NV and Cronos Group Inc.

The brand portfolios of Altria's tobacco operating companies include Marlboro, Black & Mild, Copenhagen, Skoal, on! and NJOY. 

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