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Altria acquires Green Smoke

| February 3, 2014

Altria Group’s NuMark subsidiary has acquired the e-vapor business Green Smoke for $110 million in cash plus up to $20 million in incentive payments, reports Wells Fargo Securities.

Posting $40 million revenue in 2013, the majority of Green Smoke’s sales are online in the U.S. The company’s retail sales in convenience stores were $3.9 million last year, according to Nielsen, representing a 0.8 percent market share.

According to Wells Fargo, Green Smoke presents an opportunity for Altria to develop a portfolio of e-vapor brands to complement its existing MarkTen e-vapor product. Green Smokes products are bigger and have stronger batteries than MarkTens, and they don’t look like traditional cigarettes.

Wells Fargo believes Altria can leverage its sales force, retailer relationships and marketing expertise to quickly bring broader distribution to Green Smoke.

PMI and Altria to cooperate on e-cigs

| December 22, 2013

Philip Morris International and Altria Group have established a strategic framework to commercialize reduced-risk products and e-cigarettes. Under the terms of a set of licensing, supply and cooperation agreements, Altria will make available its e-cigarette products exclusively to PMI for commercialization outside the United States and PMI will make available two of its candidate reduced-risk tobacco products exclusively to Altria for commercialization in the United States.

The companies expect PMI’s products in the U.S. to be regulated as Modified Risk Tobacco Products. Any commercialization would be subject to Food and Drug Administration (FDA) authorization.

The agreements also provide for cooperation on the scientific assessment and regulatory engagement and authorization related to these products with the FDA, and for a similar framework for e-cigarettes with the relevant regulatory authorities in international markets. In addition, the agreements provide for the sharing of improvements to the existing generation of products.

“PMI firmly believes that reduced-risk tobacco products, as well as e-cigarettes, represent an important step toward achieving the public health goal of harm reduction, a potential paradigm shift for the industry and a significant growth opportunity for the company,” said PMI CEO André Calantzopoulos.

“Further to our plans for international test market introduction of our candidate reduced-risk products as of the second-half of 2014, this agreement establishes a roadmap for commercialization in the U.S., subject to FDA authorization. At the same time, it provides us with a platform to accelerate our entry into international e-cigarette markets while we continue to develop future versions,”

 

Altria to webcast annual meeting

| May 10, 2013

The Altria Group is due to host a live audio webcast of its 2013 Annual Meeting of Shareholders on May 16 starting at 9 a.m. Eastern Standard Time.

Directions for pre-event registration are at www.altria.com.

An archived copy of the webcast, which will be in listen-only mode, will be made available at www.altria.com.

‘Light’ label could cost Altria $544 million

| April 25, 2013

Altria Group Philip Morris USA unit falsely marketed its “light” cigarettes as a healthier choice than regular cigarettes and should pay $543.6 million in restitution to California smokers, a lawyer said at the start of a trial, according to a story in Bloomburg News.

Mark Robinson, who represents smokers who brought the lawsuit as a class action, said in state court in San Diego today he will present internal Philip Morris documents proving its top executives were aware that Marlboro Lights were as addictive and dangerous to smokers as Marlboro Reds and continued selling the Lights as a healthy alternative.

“Their own documents tell the truth,” Robinson said in his opening statement at the nonjury trial. He said financial experts will testify in support of his request for damages for a class of smokers from January 1998 to April 2001.

The case, filed in 1997, accused Philip Morris and other tobacco companies of making misleading statements about the health risks and addictiveness of smoking, and sought restitution for money that smokers spent on cigarettes.

Philip Morris USA, based in Richmond, Virginia, is the only remaining defendant in the case and the only claim still at issue is that it made false statements concerning light cigarettes. California Superior Court Judge Ronald S. Prager is presiding over the trial.

Altria plans e-cig sales, Marlboro demand falls

| April 25, 2013

Altria Group, the largest seller of tobacco in the U.S., plans to introduce an e-cigarette this year, chasing smaller rivals as demand for traditional smokes declines.

The e-cigarette will be sold in an undisclosed market starting in the second half of 2013, Richmond, Virginia-based Altria said today in a statement. The company declined to provide additional information until a conference call with analysts today, according to a story in Bloomburg News.

CEO Martin Barrington is trying to catch up to smaller rivals such as closely held NJOY and Lorillard Inc., which says its Blu e-cigs brand controls more than 40 percent of the U.S. market. Reynolds American Inc. said this week it plans to expand its Vuse e-cigarette this year.

First-quarter cigarette shipments fell at Altria, Winston-Salem, North Carolina-based Reynolds and Greensboro, North Carolina-based Lorillard. Altria’s U.S. volume tumbled 5.2 percent, with top-selling Marlboro slipping 5.5 percent.

Lorillard CEO Murray Kessler told analysts yesterday the company estimates that e-cigarette sales displaced consumption of about 600 million cigarettes in the first quarter. That translates to an annual rate of about 2.4 billion cigarettes, accounting for about 1 percent of the U.S. market, according to Kenneth Shea, a Bloomberg Industries analyst in Skillman, New Jersey.