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British American Tobacco Plc is raising by 16 cents — effective Sunday — the list price of its top traditional cigarette brand Newport, according to an industry analyst.

British American Tobacco Plc has increased its per-pack pricing for most of its traditional and electronic cigarette brands effective Sunday, an industry analyst disclosed Thursday.

It would be R.J. Reynolds Tobacco Co.’s third per-pack price increase for 2022 and follows four hikes conducted in 2021.

Goldman Sachs analyst Bonnie Herzog released a detailed analysis to investors of the Reynolds list-price hikes.

The list price is what wholesalers pay manufacturers for their traditional cigarette products. The increase typically is passed on to customers at retail.

Reynolds could not be immediately reached for comment on Herzog’s report, which she said was based on “industry trade contacts” that typically are accurate.

For Reynolds’ top-selling brand Newport, the list price is up 16 cents per pack, or 2.3%. Newport is the No. 2 brand in the U.S. trailing just Philip Morris USA’s Marlboro.

Altogether, Reynolds has raised its list price by 88 cents over the last 8 months for many of its top brands, as well as a combined $1.45 since January 2020.

Going up by 14 cents per pack is No. 3 Camel and No. 4 Pall Mall’s Box style.

For No. 5 Natural American Spirit, the price hike is between 16 and 24 cents per pack depending on the style.

Other Reynolds traditional cigarette list-price hikes will be as much as 22 cents. Affected are: Camel non-filter, Doral, GPC, Lucky Strike non-filter, More, Pall Mall vintage gold, Tareyton, Capri, Dunhill, Kamel Red, Misty, Now, Pall Mall classic non-filter, True, Carlton, Eclipse, Kent, Monarch, Old Gold, State Express 555 and Vantage.

For Natural American Spirit, there will be a 10-cent per pouch increase for NAS RYO brand, along with a 40-cent per tin.

For Vuse Alto e-cigarette products, the two-pod packs will rise by $1.70 per carton, while the four-pod pack rose by $3.40 per carton.

Over the past two months, Vuse has overtaken Juul as the top-selling e-cigarette, according to Nielsen’s monthly analysis of convenience store sales.

Herzog said that with Reynolds giving vendors earlier notice than typical, “it could encourage pre-buying.”

“We continue to expect strong net price realization for the industry given manufacturers’ strong pricing power.”

Raising the list price so frequently can push smokers toward more discount options, particularly with regular unleaded gas prices as historic levels.

“Bottom line, price increases are generally viewed favorably (by investors) and are a critical driver of tobacco manufacturers’ revenue and earnings growth, particularly as manufacturers realize almost three times the leverage on earnings from a point of pricing than a point of volume,” Herzog said.

“However, given the concerns surrounding the health of the low-income consumer, we believe investors may see some risk to cigarette manufacturers’ ability to continue to pass on such strong pricing in this environment.

“Having said that, both BAT and Altria seem to be fairly comfortable with the elasticity as they continue to raise prices.”

The latest Reynolds planned price hikes is just the latest example of “the cigarette money-spinning machine continuing at full throttle,” said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several e-cigarette and health studies.

“It is worth considering the market implications of cigarettes being an extraordinarily and ever-increasingly profitable business, while regulations ban or otherwise disadvantage low-risk alternatives.”

A Democratic-sponsored bill in the U.S. House, titled the “Tobacco Tax Equity Act,” would double the federal tax on traditional cigarettes. It appears to have stalled since an initial burst of discussion in September.

As fewer U.S. adults smoke traditional cigarettes, BAT and Altria are shifting more sales toward smokeless tobacco products, such as electronic and heat-not-burn traditional cigarettes, moist snuff and snus.

Yet, traditional cigarette manufacturers are benefiting from anti-tobacco advocates’ efforts targeting electronic cigarettes, particularly use by those under age 21, Sweanor said.

In February 2020, the Food and Drug Administration limited closed-pod flavors to menthol and tobacco. The FDA raised the legal smoking age from 18 to 21 in December 2019

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British American Tobacco Plc is raising by 16 cents — effective Sunday — the list price of its top traditional cigarette brand Newport, according to an industry analyst.

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