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, effective immediately.
The increase is the fourth in 14 months for the nation’s two largest cigarette makers.
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 an insurance company over health-care costs associated with smoking.
Reynolds spokesman Richard Williams said the price increase has “absolutely nothing” to do with the Minnesota settlement, but rather “reflects the ongoing cost of conducting business.”
A pack of cigarettes, whether premium or generic, now costs an average of $1.95, including taxes, at retail outlets nationwide, according to the Tobacco Institute, an industry group.
The companies last raised prices in January, pushing up the price by 2.5 cents a pack. The latest round of price hikes began in March 1997, when the companies raised the price 5 cents a pack, followed by a 7-cent boost in September.
The January price hike came one day after a federal judge approved Texas’ record-setting $15.3-billion settlement with the industry.
On Friday, tobacco companies, including Philip Morris, reached a $6.6-billion settlement with Minnesota and Blue Cross and Blue Shield of Minnesota. They had been seeking reimbursement for health-care costs associated with smoking.
Shares of Philip Morris, which makes Marlboro and other brands, fell 38 cents to close at $38. RJR Nabisco Holdings Corp., parent of R.J. Reynolds, whose brands include Camel, rose 6 cents to close at $28. Both trade on the New York Stock Exchange.
