Altria to Expand Marlboro Snus Test

NEW YORK -- For the first time since early 2009, Altria Group's Philip Morris USA (PM USA) will expand the trial of its Marlboro Snus smokeless, spitless tobacco product to new markets this month.
Marlboro Snus will soon be available in select markets in Wyoming, Utah, Nevada, California and Colorado, Altria spokesman Bill Phelps told CSNews Online late last week. This expansion plan was first hinted at by Michael E. Szymanczyk, chairman and chief executive of Altria Group, during the Barclays Capital Back-to-School Consumer Conference in September, where he revealed the product would enter new markets in the fall.
Snus has been in test market sine 2007, said Phelps, and the company has learned, received feedback and made some changes to the product as a result. New Marlboro Snus includes smaller packaging that contains six pouches, down from 12 pouches, along with a larger pouch size, according to Phelps.
The Marlboro Snus test was previously expanded at the beginning of this year when it entered Phoenix. It also expanded in March 2008 to cover Indianapolis, where the company's initial snus product -- Taboka -- was tested in 2007, and later discontinued when the Marlboro-branded product entered the market.
Marlboro Snus -- a pouch product designed for adult smokers who are interested in smokeless products as an alternative to cigarettes -- is also currently in test market in Dallas.
Meanwhile, new Copenhagen Wintergreen moist smokeless tobacco, by Altria's U.S. Smokeless Tobacco Co. (USSTC), hit shelves nationwide last week, Phelps told CSNews Online. The 200-year-old brand is banking this new product on the popularity of the wintergreen flavor, which is largest in the MST segment, at 40 percent, he noted.
And Altria's John Middleton will roll out a no-tip cigarillo style of its Black & Mild cigar in the Southeast U.S. this month.
Another new product hits shelves early this month -- L&M Bold -- which is a full-flavor menthol cigarette. This new product was also mentioned by Szymanczyk at the Barclays conference.
Also in Altria's cigarette business, there are plans for two line extensions under the Marlboro Special Blend brand that will be available nationwide early next year, Phelps said. Two new flavors will be "based on the classic Marlboro flavor," he added.

Philip Morris to buy South African snuff maker

Philip Morris International Inc., maker of Marlboro and other cigarettes for sale overseas, has agreed to buy a Swedish company's South African snuff and pipe-tobacco operations for roughly $222 million.
Philip Morris International estimated that Swedish Match South Africa Ltd.'s products account for about 31 percent of total tobacco consumption in South Africa. The brands involved in the deal, announced yesterday, include Boxer, Best Blend and Taxi.
In March 2008, Philip Morris International, with offices in New York and Lausanne, Switzerland, was spun off from Henrico County-based Altria Group Inc., which owns Philip Morris USA.
Swedish Match also owns Swedish Match North America, a Chesterfield County-based maker of cigars and smokeless tobacco.
Spokesmen for Altria and Swedish Match North America said their operations are not affected by the deal.
The deal "represents an excellent strategic fit for our business in South Africa," Jean-Claude Kunz, president of Philip Morris International's Eastern Europe, Middle East and Africa region, said in a statement.
Swedish Match South Africa reported sales of roughly $88 million last year.
Philip Morris International, the world's largest non-governmental cigarette seller, hopes to boost sales of smokeless-tobacco products to offset decreased demand for cigarettes because of concerns about health, smoking bans and price increases.
In February, Philip Morris International announced a 50-50 joint venture with Swedish Match AB to make and sell smokeless products such as snus -- teabaglike pouches that users stick between cheek and gum.
Philip Morris International said it expects to complete the acquisition of the South African company by the end of the fourth quarter, after approval by South African regulators.
"This agreement with Philip Morris International is in line with Swedish Match's strategy to focus on smoke-free tobacco, cigars and lights products," Swedish Match AB President and CEO Lars Dahlgren said in a statement.
Swedish Match South Africa will continue to distribute lighters, matches and cigars for Swedish Match, the company said.