Lorillard Increased Prices on its Top Brands

Lorillard Brands

Lorillard Inc. has increased by 6 cent per pack prices on some of its top selling cigarette brands. The company representatives say that this measure is need to be done in order to keep pace with its major rival on the cigarettes market Altria Group Inc.

The Greensboro, tobacco manufacturer of Newport and a number of other cigarette brands, is located in North Carolina. It increased prices on cigarettes on Friday, May 9.

Lorillard company increased prices on its top selling brands such as Newport Menthol, Newport Non-Menthol and Maverick. The company’s price adjustment comes right after the rival Altria proposed to increase by 6 cents price on Marlboro cigarettes, its flagship brand.

Previously Philip Morris USA announced about price increases on its cigarettes. Thus Parliament was increased by 11 cents and other cigarette brands (including Marlboro)  by 6 cents per pack. At the same time, they decided to cut the off-invoice promotion allowance on Marlboro and L&M by 6 cents per pack, from 8 cents per pack.

New allowances will be 15 cents per pack on L&M and 2 cents per pack on Marlboro. It came into action from May 11.  However, price protection on Marlboro will take place through May 25.

Analyst Bonnie Herzog from Wells Fargo Securities considers that traders have been building up their supply in anticipation of price increases. This can compensate volume pressures due to e-cigarettes. There is expected overall cigarette net price realization of about 4%.

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