Altria stubs out Marlboro Ultra Smooth: report

NEW YORK Mon Jun 23, 2008 1:21am EDT

Packs of cigarettes are stacked inside a supermarket in New York September 21, 2004.REUTERS/Shannon Stapleton

Packs of cigarettes are stacked inside a supermarket in New York September 21, 2004.

Credit: Reuters/Shannon Stapleton

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NEW YORK (Reuters) - Altria Group Inc's (MO.N) Philip Morris USA has cancelled its Marlboro Ultra Smooth cigarettes, highlighting challenges it faces in trying to grow its tobacco business despite a decline in U.S. cigarette sales, The Wall Street Journal reported on Monday.

Altria gets nearly all its revenue from Philip Morris USA after spinning off its Philip Morris International operations, the Journal reported.

Philip Morris's sales volume fell 4.6 percent last year, worse than the 4 percent decline in the overall U.S. cigarette market, the Journal reported. Underlying sales volume fell 3.6 percent, the Journal added.

The company expects overall cigarette sales to fall at an annual rate of 2.5 percent to 3 percent in coming years, the Journal reported.

Philip Morris has turned to developing tobacco products that are not as risky to their user's health, the Journal said. Ultra Smooth cigarettes include an activated carbon filter that delivers nicotine but with potentially less exposure to the carcinogens of conventional cigarettes, the Journal reported.

A Philip Morris spokesman was unavailable for comment.

(Reporting by Robert MacMillan; editing by Sue Thomas)

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