Altria Group Inc. and Its Interest in Growing Its Business

Published on August 6, 2008 4:17 AM

Because of smoking ban and price increases domestic cigarette sales continue to decline that’s why Altria Group Inc. (one of the world's largest Tobacco Corporations) began to grow its business in other tobacco categories.

Chief Executive Michael Szymanczyk told shareholders that while Altria will still be able to build market share in the declining cigarette business, success depends on finding alternative products that are satisfying to consumers and reduce health risks.

Mr. Szymanczyk sustained: "As the company looks to the future, it has clear recognition of the fact that conventional cigarettes are harmful in society and we'd like to make some progress on improving that situation."

Szymanczyk said that even Philip Morris USA (the nation's No. 1 cigarette manufacturer) will deal with fewer cigarette sales by capitalizing on its Marlboro brand and selling more smokeless products. It has projected that cigarette sales volume will fall between 2.5% to 3% in the United States over the next few years.

Last year, Philip Morris began testing of its Marlboro-branded moist smokeless tobacco product - cut tobacco placed in the mouth --in Atlanta and recently expanded to counties in the surrounding metropolitan area. It also began testing its spit less product, which is a moist powdered tobacco, called Marlboro Snus (pronounced "snoose") in Dallas last year, and also has expanded to Indianapolis.

Szymanczyk said that the company already has made a number of modifications to those products based on input from consumers in the test markets.

Altria now consists mainly of Philip Morris USA, cigar manufacturer John Middleton Inc., Philip Morris Capital Corp. and a 29% stake in London-based SABMiller PLC, brewer of Miller beer.