CHICAGO, April 15 (Reuters) - R.J. Reynolds Tobacco Co is expanding the test of its Camel snus smokeless tobacco product to the largest U.S. markets, including New York City, Chicago and Los Angeles, a spokesman said on Tuesday.
The expansion is the latest sign that R. J. Reynolds, a unit of Reynolds American Inc RAI.N, sees a U.S. future for snus, a refrigerated smokeless and spitless tobacco product with roots in Sweden.
“I thought the learning curve was going to be a little bit harder on this one domestically,” Gregg Warren, analyst at Morningstar, said of U.S. acceptance of snus. “Apparently they are seeing some lift for them.”
Reynolds introduced snus in April 2006 in the Austin, Texas and Portland, Oregon, markets and expanded to six other markets in July 2007.
The product, which is sold out of a refrigerator on store counters, is part of the U.S. tobacco industry’s attempt to come up with new products to sell in a market where cigarette smoking is steadily declining.
Reynolds rival Philip Morris USA, a unit of Altria Group Inc (MO.N), started testing its own Marlboro-branded snus in the Dallas-Fort Worth market in August 2007 and expanded that test to Indianapolis in March 2008. A spokesman declined to comment on an other potential expansion plans snus.
Camel snus will be launched in Los Angeles; Chicago; New York; Atlanta; Washington, D.C.; and other markets in May, Reynolds spokesman David Howard said.
Reynolds American shares were down 33 cents at $57.54 on Tuesday afternoon on the New York Stock Exchange. (Reporting by Brad Dorfman, editing by Gerald E. McCormick)