NEW YORK (AP) _ Philip Morris USA is leading the way in raising the wholesale price of its cigarettes in an effort to increase company revenues as tobacco lawsuit settlements pile up.
Philip Morris and Lorillard Tobacco Co. confirmed Monday they raised their prices $3 per thousand cigarettes, sending the price of Morris’ Marlboro and Lorillard’s Kent brands up 6 cents a pack.
When one company raises prices, others typically follow suit. Spokesmen for R.J. Reynolds, another leading cigarette maker, did not immediately return phone calls seeking comment.
Analysts said the price increases were intended to offset the $36.9 billion in tobacco lawsuit settlements with Mississippi, Minnesota, Texas and Florida and that further hikes are expected relatively soon with the settlement of lawsuits pending with 37 other states.
``Prices are going up because you have lots in the way of litigation settlements. They are not going to sit around and have their profitability tank,″ said Emanuel Goldman, an industry analyst with PaineWebber in San Francisco.
``They are just passing through the costs and trying to stay ahead of the judges,″ Goldman said.