Cigarette makers [3] are taking advantage of the upcoming 62-cent increase in the U.S. federal excise tax on cigarettes to raise prices. Reynolds American [4], maker of Camel [5], Kool and Winston cigarettes, raised the price of their brands by 41 cents, while Altria [6], parent company of Philip Morris [7] (PM), raised the price of a pack of Marlboros by 71 cents. PM's increase comes after the company had already raised the price of a carton of Marlboros by 90 cents in February. The federal tax increase goes into effect April 1. An Altria spokesman said the price increases are to cover the costs of the federal excise tax, but analysts at Citigroup said [8] the move is to help boost cigarette makers' profits. Tobacco companies have previously argued against tax increases [9], saying they will make smoking too expensive for many people, while quietly raising prices on their products in advance of the increase [10].
In keeping with the past, Altria is currently arguing on its Web site [11] that the current tax increase places an unfair burden on smokers.