Contrary to the cigarettes market, smokeless products’ volume in the U.S. has been growing over the last couple of years. A large portion of the consumer base for these products consists of smokers who are switching with the belief that it is a less harmful alternative to cigarette smoking. Smokeless products are also subject to far lower excise duties compared to cigarettes, leading to cheaper prices. The market size for smokeless products in the U.S. was around 1.33 billion packs/cans in 2011.
Altria’s smokeless products segment’s 2012 third-quarter and nine-month net revenues increased 2.6% and 2.8%, respectively, primarily due to higher pricing and higher volume, which partially offset by unfavorable mix due to growth of lower priced products.
