Philip Morris USA said on Wednesday it was raising prices on all its cigarette brands by 10 cents per pack as of 18 December, a move that had been expected by analysts.

The price increase was accomplished by lowering promotional discounts the company offers on its Marlboro, Virginia Slims, Parliament and Basic brands, while raising list prices on other brands, a spokesman for the unit of Altria Group said. Since changes in promotional discounts are typically passed on to consumers, the move could raise the average price a smoker pays for a pack of top-selling Marlboro cigarettes at a convenience store to US$ 4.04 from US$ 3.94, for example. Price increases can vary if retailers also add to the increase.
Six cents of the increase will be needed to cover increased payments by Philip Morris to US states under the Master Settlement Agreement between cigarette companies and the states, Citigroup analyst Bonnie Herzog said in a research note.
The move comes about a year after Philip Morris USA last increased prices, a 5-cent-per-pack hike in December 2005. (pi)