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Vector Group Ltd. Message Board

  • wareham2620 wareham2620 Jan 14, 2009 9:35 AM Flag

    A tax that may be good for VGR

    The cheaper the better...

    Makers
    Tobacco makers could face sharp increase in federal excise taxes, Citigroup analyst says
    Wednesday January 14, 2009, 9:22 am EST
    Yahoo! Buzz Print Related:Citigroup, Inc., Altria Group Inc., Reynolds American Inc.
    NEW YORK (AP) -- Tobacco companies may face a jump in excise taxes, which may could lead to higher prices as sales decline.

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    {"s" : "c,mo,rai","k" : "c10,l10,p20,t10","o" : "","j" : ""} In a client note, Citigroup Inc. analyst Adam Spielman said a 61 cent increase on a pack of cigarettes and "much sharper" increases on other tobacco products to fund the State Children's Health Insurance Program will be presented to both the Senate Finance Committee and the House by Thursday. The increase would raise federal excise taxes on cigarettes to $1 a pack.

    Congress had passed the 61 cent increase in 2007, but it was vetoed by President George Bush. Spielman said he expects the current bill to pass quickly in Congress.

    Increased excise taxes hurt sales, Fitch Ratings said in a previous note. "It is likely tobacco companies will take pricing in order to offset depressed volume, as a result of increased excise taxes, which will in turn depress volumes further" Fitch's note said.

    Altria Group Inc. fell to $16.09 in premarket trading Wednesday. The stock had closed New York trading Tuesday up 43 cents, or 2.72 percent, to $16.22.

    Reynolds American Inc. was unchanged in premarket trading Wednesday. The stock had gained 41 cents to $40 in New York trading Tuesday.

    http://finance.yahoo.com/news/Ahead-of-the-Bell-Tobacco-apf-14057940.html

 
VGR
20.42+0.18(+0.89%)Jul 29 4:07 PMEDT

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