Analyst: Tobacco giant set to introduce Newport co
A tobacco industry analyst says that Philip Morris USA, the country's No. 1 cigarette maker, is poised to introduce a Marlboro-branded menthol that will compete directly with Newport.
Newport, made by Greensboro-based Lorillard Tobacco Co. (NYSE: CG - News), is the No. 1 menthol brand in the country and the No. 2 cigarette brand overall. No. 1 is Philip Morris' Marlboro.
Bonnie Herzog, a tobacco industry analyst with Citigroup, said in a note to investors that industry sources have told her that Philip Morris plans to introduce "Marlboro Smooth," which aims to compete with Newport.
"Our contacts stated that in a consumer test, 40 percent of Newport smokers indicated they prefer the new Marlboro Smooth and would purchase it if they had the opportunity," Herzog wrote.
She added that she anticipates the new brand will be sold at a lower introductory price for the first few months, and "then be aggressively discounted like Marlboro Menthol."
The new brand could hit store shelves by February, she wrote.
Philip Morris is a subsidiary of Altria Group (NYSE: MO - News), which is based in New York City.
by The Business Journal