Manufacturer of smokeless tobacco UST on Wednesday said it would spend US$ 80 million in 2006 to promote its premium smokeless tobacco brands as it tries to stop the movement of consumers into lower priced products.

The maker of the Skoal and Copenhagen brands also said it would spend an additional US$ 10 million in its continuing effort lure adult cigarette smokers to smokeless tobacco.
The company said its efforts to grow the smokeless tobacco category as a whole have been successful. "However, this growth is being more than offset by down trading from premium brands to price value brands, exacerbated by the negative impact that high gasoline prices are having on our adult consumers," Murray Kessler, UST president and chief operating officer, said in a news release.
The company, whose shares are down about 18 per cent this year, plans to target areas of the country that are more "price sensitive" as it tries to promote loyalty for its higher-priced tobacco brands, UST, which also makes Columbia Crest and Conn Creek wines, said.
The company also said it expected 2005 earnings to be at the midpoint of its forecast range of US$ 3.20 to US$ 3.25, and said it was targeting 2006 earnings of US$ 3.05 a share, within its previous forecast of US$ 3 to US$ 3.14. The company has been hit by declining sales in the higher-priced premium tobacco segment. (pi)