Following Philip Morris' reduction on its off-invoice discount by US$ 0.05 per pack on its four core brands, Reynolds American (RAI) took a list price increase on its non-support brands.

RAI is taking a price increase of US$ 0.075 per pack on brands such as Capri, Lucky Strike, Tareyton, etc. Also, RAI increased its prices by US$ 0.10 per pack on Viceroy and by US$ 0.05 per pack on GPC, Misty, Forsyth, Monarch and Best Value brands. RAI also increased its prices by US$ 0.05 per pack on its Natural American Spirit Brands, which has very strong brand loyalty.
Price increases are effective 3 January 2006, meaning distributors have an opportunity to buy-in, possibly helping RAI to finish off the year with stronger volume. RAI did not take a price increase on its support and investment brands (Camel, Kool, etc); analyst Bonnie Herzog of Citigroup, however, expects RAI to lower promos in the marketplace where necessary. (pi)