Marlboro shipping volume dropped 10 per cent in the third quarter as US wholesalers reduced inventory stockpiled earlier in the year, according to Altria Group.

The number of total cigarettes that Altria, owner of Philip Morris (PM) USA, sold declined 9 per cent in the third quarter to 33.3 billion cigarettes compared with a year ago. Marlboro volume fell to 28.7 billion sticks, a decline in US market share of  0.9 percentage point to 41.7 per cent. At Altria’s US Smokeless Tobacco unit, volume of the Copenhagen and Skoal brands increased nearly 7 per cent to 160.9 million cans and packs in the three months ending 30 September.
“PM USA believes that third-quarter volume comparisons were negatively impacted because the trade depleted cigarette inventories in the third-quarter that had been built in the first half of 2011. PM USA’s reported domestic cigarette shipment volume for the first nine months of 2011 declined 5.4 per cent,” Altria said in a statement today.
Also, Altria will cut the number of salaried workers at its cigarette business and related service subsidiaries by 15 per cent as cigarette sales continue to decline industrywide. The group plans to trim USD 400 million in annualized costs by the end of 2013 as it reported quarterly earnings Thursday, which would include about USD 300 million in employee separation costs and additional reductions in spending.
Altria would not say how many people would be impacted by the layoffs. The company said employees that will lose their jobs will be informed by mid-December and most will leave the company by late February.
Altria has 10,000 employees across the U.S., including about 4,600 in Virginia. (ci)