RJ Reynolds Tobacco shipment volume fell 2.7 per cent or 500 million cigarettes in the last three months of 2012, representing most of the overall US industry decline, according to parent company Reynolds American International (RAI).

Volume for the industry as a whole fell 600 million sticks, or 0.8 per cent, to 71.1 billion units. RJR’s share of industry total was 17.1 billion units, or a 26.4 per cent share of the US market. RAI said more than half of the decline occurred with Doral, a non-key value brand for RJR.
Adjusted operating income at RJR Tobacco fell 4.5 per cent to USD 571 million. Higher pricing and improved productivity were not enough to offset volume declines and increased promotional outlays, the company said. For the full year, adjusted operating income declined 2.2 per cent to USD 2.3 billion.
Operating income rose at RAI subsidiaries American Snuff and Santa Fe Natural Tobacco. Shipping volume at Santa Fe increased 100 million units to 800 million units, a gain of more than 20 per cent. Shipped cans of moist snuff, including American Snuff’s Grizzly brand, increased by 7.5 million, or 7.2 per cent, in the fourth quarter. (ci)