Philip Morris, R.J. Reynolds Raise Prices

Philip Morris Cos. and R.J. Reynolds Tobacco Co. on Monday raised wholesale prices on their cigarettes by 5 cents a pack, or $2.50 per thousand cigarettes, effective immediately.

The increase is the fourth in 14 months for the nation’s two largest cigarette makers.

In a separate development, BAT Industries’ Brown & Williamson Tobacco Corp. has been notified by the Justice Department that it is a target of the government’s long-running criminal probe of the tobacco industry, two people familiar with the government’s case told Bloomberg News.

The tobacco company has been informed in writing that prosecutors want to examine certain company records and could seek to question company officials before a federal grand jury, the sources said.

B&W; officials did not return telephone calls seeking comment.

On Friday, the tobacco industry agreed to pay more than $6 billion over 25 years to settle a lawsuit by the state of Minnesota and Blue Cross/Blue Shield of Minnesota over health-care costs associated with smoking.

Reynolds spokesman Richard Williams said the cigarette price increase has “absolutely nothing” to do with the Minnesota settlement, but rather “reflects the ongoing cost of conducting business.”

Meanwhile, the government of Guatemala is expected to announce today that it will sue the tobacco companies operating there, the first suit by a country to mimic successful U.S. cases.

A Shares of Philip Morris,fell 38 cents to close at $38. RJR Nabisco Holdings Corp., parent of R.J. Reynolds rose 6 cents to close at $28. Both trade on the New York Stock Exchange.