Altria Boosting Smokeless Tobacco Prices

Source from:  AP 05/24/2010

Cigarette maker Altria Group Inc. plans to raise prices on its U.S. smokeless tobacco brands like Copenhagen, Skoal and Red Seal. For most brands the increase will be 10 cents a can, which cost on average $4.15 each at retail. Bill Phelps, a spokesman for the Richmond, Va., company, said Friday the company is always evaluating its strategies, when asked the reasons for the price increase. Earlier this month, the company's Philip Morris USA announced it would raise its price of 8 cents a pack on most cigarette brands, such as Marlboro. Packs of Marlboro have an average retail price of $5.42, he said. Stifel Nicolaus analyst Christopher Growe said in a note earlier this week the price increase for cigarettes was above his estimates. "We believe this pricing is fully justified in the context of the strong market share performances of the premium brands of late," he said, citing Marlboro. He said sales volume likely won't be affected even though consumers are still challenged by economics and tax increases on cigarettes. Growe rates the stock a "buy" with a $22 target price. Shares of Altria rose 20 cents to $20.87 in late trading Friday. Enditem