Tobacco Analyst Says Reynolds Prepares For Fourth Traditional Cigarette Price Hike In 2021 | Local



Pricing strategy

It’s a pricing strategy that has become at least a biannual event for tobacco companies since 2014.

However, Reynolds’ latest planned increase comes three months after Reynolds raised its list price by 14 cents a pack on July 5 and April 5, and 13 cents on January 28.

The increases follow four price hikes from Reynolds in 2020 that were worth a total of 47 cents a packet.

In total, Reynolds has increased the list prices of its major brands of traditional cigarettes by a combined amount of $ 1.02 since January 2020.

Herzog said investors tend to view price increases positively because they “are essential drivers of growth in tobacco companies’ revenues and profits.”

“Manufacturers achieve almost three times the leverage on profits from a price point than from a volume point. “

As fewer American adults smoke traditional cigarettes, BAT and Altria are shifting their sales towards smokeless tobacco products, such as traditional electronic and non-scorching cigarettes, wet snuff, and snus.

Manufacturers of traditional cigarettes are benefiting from the efforts of tobacco control advocates targeting e-cigarettes, especially those under the age of 21, said David Sweanor, adjunct professor of law at the University of Ottawa and author of several. studies on electronic cigarettes and health.


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