Philip Morris to cut cigarette prices to keep customers

Philip Morris USA, the largest US cigarette maker, is cutting prices of its four biggest brands, including Marlboro, to keep customers from switching to lower-price cigarettes sold by discount manufacturers.

Starting tomorrow, Altria Group Inc.’s Philip Morris unit is offering a discount of 80 cents a pack, up from 75 cents, to retailers that meet conditions such as prominently displaying its brands, spokeswoman Jamie Drogin said. The Richmond, Virginia-based unit began the discount program in February after its shipments dropped twice as fast as the industry average.

Altria’s decision to boost promotional spending to stave off discount cigarette makers and websites that sell low-price brands has contributed to four straight quarters of declining net income.