Philip Morris to Raise Cigarette Prices

Philip Morris Cos. will raise wholesale cigarette prices an average of 2.5%, the third increase in 10 months, as it seeks to pay for a proposed $368.5-billion national settlement of health-related litigation. The New York-based company said it will raise the prices charged to distributors for Marlboro, Virginia Slims and other brands starting Jan. 26 by $1.25 for each 1,000 cigarettes, or 2.5 cents a pack. Assuming the price increases are matched by competitors RJR Nabisco Holdings Corp., Loews Corp. and others, the industry will have raised cigarette prices by 16% in less than a year, said Sanford C. Bernstein & Co. analyst Gary Black. The increase will raise $600 million a year, Black said. The industry raised prices 5.8% in March and 7.6% in September. Philip Morris shares rose 75 cents to close at $42.69 on the NYSE.