RAI, ITG & Liggett Follow Altria's List Price Lead
NEW YORK — Three more tobacco companies have increased their cigarette list prices.
According to Wells Fargo Securities LLC, Reynolds American Inc. (RAI), ITG Brands LLC and Liggett Vector Brands each bumped up wholesale list prices by 8 cents per pack on their key cigarette brands. The moves equal a roughly 2-to-3 percent increase, said Bonnie Herzog, managing director of tobacco, beverage and convenience store research at Wells Fargo Securities.
These changes are effective for orders billed after March 16 for RAI brands, March 17 for ITG brands and March 20 for Liggett brands.
However, Liggett is not taking an increase on Eagle 20's cigarette brand. In addition, there are no changes to the current off-invoice discount values for Newport Non-Menthol styles, she said.
Altria Group Inc.'s Philip Morris USA lead the wave of list-price increases with a similar 8-cent increase on its cigarette portfolio effective March 19, as CSNews Online previously reported.
The changes come two months earlier than expected. Tobacco companies typically make pricing moves in May and November. However, as Herzog explained, the early pricing actions were taken ahead of California's $2 per pack cigarette tax increase which goes into effective April 1.
The actions should also serve to help offset Pennsylvania's $1-per-pack increase, which took hold Aug. 1.
"These price increases are positive, indicating the industry's pricing power and its ability to offset any volume declines associated with the coming/recent tax increase in California and Pennsylvania," Herzog said.
RAI, based in Winston-Salem, N.C., is the parent company of R.J. Reynolds Tobacco Co., Santa Fe Natural Tobacco Co. Inc., American Snuff Co. LLC, Niconovum USA Inc., Niconovum AB and R.J. Reynolds Vapor Co.
Greensboro, N.C.-based ITG Brands' cigarette brands include Winston, Kool, USA Gold and Maverick, and cigar brands Dutch Masters, Backwoods and Phillies. It also sells blu e-cigarettes.
Morrisville, N.C.-based Liggett Vector Brands is the exclusive sales, marketing and distribution agent for Liggett Group and Vector Tobacco. Its line of tobacco products includes Pyramid, Eagle 20's, Liggett Select, Eve and Grand Prix.