Liggett Enters Snus Race

Vector Group Ltd.’s subsidiary, Liggett Group, said today that it plans to introduce Grand Prix snus, a Premium quality pouched tobacco product designed for adult smokers who are interested in smokeless tobacco alternatives to cigarettes. Grand Prix snus will be available in a variety of test markets beginning in May 2008.

The product is the latest addition to the Grand Prix brand, the fastest growing U.S. cigarette brand over the past two years. Grand Prix snus will be sold at value pricing and will be available in three varieties: Original, Spearmint and Wintergreen. Snus, a tobacco pouch product that is neither a spit tobacco-like dip nor chew, is designed especially for adult smokers who are interested in smokeless tobacco alternatives to cigarettes.

Grand Prix snus will be manufactured in Sweden under an agreement with Snusab, a Stockholm-based manufacturer of premium snus products.

"We have been watching the growth and development of the U.S. snus market with great interest over the past 18 months and believe there is a significant opportunity to introduce our own snus product and build on our highly successful Grand Prix tobacco franchise," said Ronald J. Bernstein, president and CEO of the Liggett Group. "Grand Prix snus will offer adult consumers the highest quality product at affordable pricing. We are excited about this product launch and are confident that its taste and value proposition will appeal to a wide range of adult consumers. We are very pleased to work with Snusab, our Swedish-based manufacturing partner, in bringing premium quality Snus products to the U.S. market."

Grand Prix snus will be available in select retail outlets throughout the following areas: Portland, Ore.; Kansas City, Mo.; Indianapolis, Dallas/Fort Worth; Raleigh, N.C.; Orlando, Fla.; and Columbus, Ohio.

The Snus concept has been growing at a rapid rate in U.S. stores. Last year, Philip Morris USA began marketing Marlboro snus. The product utilizes a unique flavor strip and dried tobacco that spit-free and is intended to build on Marlboro’s powerful brand equity as the top-selling cigarette brand in the world, and comes in four varieties: Rich, Mild, Mint and Spice.

Offering smokers new alternatives has been a stepping stone for huge growth in the OTP segment. The category as a whole has been showing big numbers, but MST, in particular, has been leading a bold charge in the c-store industry. A USB study on smokeless products showed that in 2006, MST alone enjoyed a sales boost of 8%, reaching a peak of unforeseen sales that have continued to rise since 2004. Experts, such as Nik Modi, analyst for USB Investment Research, feel that the rising sales may have peaked in 2006, but forecast that the smokeless tobacco category will continue to hold that volume until the end of the decade. "MST growth is still in its early phase," said Modi. "It’s expected to show an increase of 6 to 8% continuing up until 2010. With the volume growth we’re seeing each year, bigger players and manufacturers are going to be getting involved and we may see that number change even more."

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