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Big Tobacco Hikes Up Price Per Pack
Posted: April 24, 2014 | tobacco | big tobacco, price, smoking, tobacco | 0 Comments
It was just announced that three major American tobacco companies have banded together in a mutual price hike. The price increase is 6¢ per pack which doesn’t seem like anything too crazy upon first glance but when you consider the sheer volume of packs of cigarettes that sell in this country on a daily basis, that’s no chump change.
Altria, Lorillard and Reynolds American will begin charging the extra 6¢ starting on December 3rd. This will mark the second price increase this year for the three companies. We will also see a 5¢ increase in a few of the smokeless tobacco products that these companies make. According the companies, the increase is design to be minimal enough that it wont alienate consumers but large enough to allow their stock value to increase and potentially raise their market share.
The pricing move is expected to help the value of the three companies stock because their rival sellers, deep-discount stores, are faced with a longer list of FDA constraints and requirements which create higher overhead.
With the ever-increasing amount of regulations placed on big tobacco, its no surprise that they have to pay more to get their heads above regulatory waters but that increased overhead is, in turn, passed on to the smoker. 6¢ may not seem like much but if the price continues to grow, a couple cents here and there definitely adds up over time.