In a note to US retailers, PM USA just announced that it is reducing its off-invoice discount to US$ 5.00 from US$ 5.50 per carton on its four core brands (Marlboro, Parliament, Virginia Slims and Basic) effective 19 December 2005.

In other words, PM USA has increased the price of its cigarettes by US$ 0.50 per carton or US$ 0.05 per pack.
“Although slightly less than last year's increase, this is something we were anticipating since the price gap continues to be manageable and there is pricing power,” says analyst Bonnie Herzog of Citigroup. “We believe the rest of the industry will follow suit. By taking another price increase, Philip Morris has signaled its continued confidence in the improving US fundamentals.” (pi)