British American Tobacco Hikes Cigarette List Prices

The change goes into effect in early October.
Melissa Kress
Executive Editor
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WINSTON-SALEM, N.C. — British American Tobacco (BAT) is taking another cigarette list price increase next month.

According to Bonnie Herzog, senior financial analyst at Goldman Sachs, the price change will go into effect with orders and deliveries on or after Monday, Oct. 2. BAT most recently hiked the list price in early summer.

"The timing of the increase appears to return to BAT's more typical quarterly cadence of price increases but also likely addresses continued cigarette volume pressures," Herzog noted.

The change will increase the list price of Newport (menthol and nonmenthol) by 15 cents to 25 cents per pack, Camel (menthol and nonmenthol) by 15 cents to 40 cents per pack and Pall Mall Box by 15 cents per pack.

The tobacco company's list price increases in June ranged from 12 cents to 26 cents per pack and went into effect on July 3.

[Read more: Backbar Shifts Reflect Continued Pressures on the Tobacco Consumer]

According to Herzog, BAT took several other price increases across its portfolio of brands but didn't raise the list price of Lucky Strike (Box) and Pall Mall Select.

Separately, BAT also announced a 13-cent-per-tin increase on Camel Snus, an 8-cent-per-tin increase on Grizzly, a 10-cent-per-tin increase on Kodiak/Hawken, a 9-cent-per-tin increase on Grizzly Snus (with no increase on Cougar), a 15-cent-per-pack increase on all styles of Natural American Spirit, a 10-cent-per-pouch and a 40-cent-per-tin increase on Natural American Spirit RYO, and a 34-cent-per-pack increase on all styles of Vuse Alto Single Pod Packs.

"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, adding that while there continues to be increased risk of potential downtrading and concerns that manufacturers have less pricing power today, brands with a very loyal customer base and strong and effective promotions should be able to keep consumers within the portfolio lineup.

Winston-Salem-based Reynolds American Inc. is a U.S. subsidiary of BAT.