In fourth-quarter Reynolds American Inc reported two times higher profits in comparison with last year due to establishment of lower legal expenses and higher prices on cigarettes. Reynolds American Inc is second large tobacco company in the USA.
These days tobacco companies including Reynolds American start producing alternatives to cigarettes such as chewing tobacco, snuff and e-cigarettes because more and more tobacco restrictions appear in many countries of the world. Numerous smoking bans and tax increases make the cigarette business tougher.
The tobacco company representatives told its cigarette volumes dropped by 7%, in comparison with its estimated industry decline of 4%. Camel volumes dropped by 3.5% and Pall Mall volumes by 6%. These brands are most popular and they account for more than 60% of the company’s total cigarette volume. Shipments of Kool, Salem, Winston, Doral dropped by 15%.
Market share of Camels gained 0.4 persentage points and have now 9% on the USA market. As to Pall Mall’s market share, it gained 0.2 percentage points and has 9.1%. The company presents Pall Mall cigarettes brand as most affordable in times of economic problems and high rates of unemployment.
Volumes of Reynolds American’s smokeless tobacco brands such as Kodiak and Grizzly increased by 8% in comparison with last year. These brands do have a 33.3% share of the U.S. retail market. The tobacco company plans to expand its e-cigarette brand Vuse by the middle of 2014.