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Philip Morris USA to reveal smokeless tobacco

Philip Morris USA will introduce a moist smokeless tobacco under the Marlboro brand. Sales will start in the Atlanta area.

The company will sell the loose, spitting tobacco in original and wintergreen flavors, and in long and fine cut, for about $3 (2.22 EUR) a can. It is part of a wider effort to sell more smokeless products in the U.S. as cigarette consumption declines due to concerns about health, smoking bans and price increases.

"This new type of moist snuff product offering kind of builds on that premium tobacco experience that Marlboro represents," Philip Morris USA spokesman David Sutton said.

Philip Morris USA is owned by New York-based Altria Group Inc., which also owns Philip Morris International.

The company said it will offer a money-back guarantee for the new product.

Analysts have long expected Philip Morris USA to enter the smokeless business.

Citigroup analyst Bonnie Herzog told investors in a Tuesday research report that Philip Morris USA "will fully cement its place in the smokeless segment" using the power of its Marlboro brand.

"We anticipate that PM USA will be able to attract the majority of smokers that will cross over into the smokeless market, as well as attract existing moist users," Herzog wrote.

Last summer, the company test marketed a spitless tobacco product, called Taboka, in the Indianapolis market. Earlier this month, Philip Morris began testing Marlboro Snus (pronounced "snoose") in the Dallas/Fort Worth area. Both products are small pouches of tobacco that in some way resemble tea bags.

Richmond-based Philip Morris USA is the biggest cigarette maker in the U.S. and holds nearly half of the total market, selling the Marlboro, Virginia Slims, Parliament and Basic brands.

Altria shares rose 22 cents to $67.22 Tuesday.

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