Tobacco Industry News

Reports

Excise tax takes a bite: Reynolds American trademark devalued
The April 1 increase in the federal excise tax on cigarettes cut into profits for the R.J. Reynolds Tobacco Co. The company’s cigarette shipments were down 10.5% during the last quarter, which is similar to the 10.4% decline in shipments seen industry-wide. To make up for lost sales, the company increased the list price of its cigarette brands for wholesalers from 41 cents to 78 cents per pack, causing some suppliers to cut back on orders. The company has discontinued all promotional buy one-get one free offers to consumers. The company’s net income was also affected by higher pension expenses. The company will continue to focus on cost reductions in the coming year to make up for lost revenue. Click here to read more.

Philip Morris looks to new products for growth
Philip Morris International Inc. (PMI) is planning new strategies to increase business since its breakaway from Altria Group Inc. At a recent shareholder meeting, the Chief Executive of PMI said that the company will be focused on developing new innovative products and targeting the overseas market. The company is following the recent trend in the tobacco industry to focus on marketing and developing new smokeless tobacco products as demand for cigarettes has been falling. Click here to read more. Click here to watch the BusinessWeek video: Philip Morris’ Global Race.

Phillip Morris/Altria has no place in NYC pension funds, councilman says (NY)
New York City Councilman Eric Gioia is pushing for the city to sell more than 6 million shares invested through pension funds in tobacco companies Philip Morris and Altria. The Councilman sees the investment in the tobacco industry as inappropriate, considering the city’s stance on fighting tobacco use and protecting public health. While the city froze any new investments in tobacco companies in 1998, four of the five pension funds offered before 1998 contain an index fund that includes Philip Morris. Click here to read more.

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