Marlboro still smoking…

February 19, 2009

Sure, the economy may be pretty dismal these days between thousands of job losses, stories about speed foreclosure hearings, and people setting their own broken bones. But all that gloom and doom doesn’t appear to have dampened consumers’ appetite for Marlboro cigarettes.

Yesterday, executives at Altria (MO) gave a presentation to analysts at the annual CAGNY conference down in Boca that was filed as an 8K. While the slides aren’t numbered (and there’s a whole heap in the deck), a few jumped out at me, including the one that showed Marlboro with 41.6% of the market share for cigarettes — more than the next 17 brands combined, as Altria points out in the following slide. That’s up .6% from 2007. So much for all of that worrying that consumers will switch to cheaper brands. Indeed, another slide shows that there’s about a 40% price differential between Marlboro and what it Altria describes as the “lowest effective” brands, basically generics. And, as this story notes, even teens don’t appear to be all that price sensitive since Marlboro was the choice of 52% of high school students.

Still, deeper into the deck — there have to be over 100 slides so hopefully the weather in Boca wasn’t particularly sunny yesterday — there’s another slide that shows that 46 states are facing budget deficits in 2009 (all of those red states make for an interesting visual) and that at least 19 of those states are looking at adding additional taxes on cigarettes. Similar legislation has been defeated in two states — Virginia and Wyoming. Deeper in, there’s also a bit of crowing about how cigarette-related judgments on appeal has dropped a whopping 99.6% over the past 5 years.

There’s also some additional bragging in the prepared comments that were part of the 8K: “While some companies have eliminated or significantly reduced their dividends since the beginning of the economic slowdown, Altria remains committed to returning cash to its shareholders through dividends,” CFO David Beran said, according to the filing.

But here’s the kicker: apparently the plush Boca Raton Resort where the conference was being held doesn’t allow any smoking.

Image source: Mel Evans/Associated Press

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