Cigarette smokers will have to pay more for their smokes, as Philip Morris USA and its main rivals, RJ Reynolds and Lorillard admitted they are going to raise prices on their brands from June 18.

The U.S. leading tobacco company confirmed it will raise prices of all of its cigarette brands by 5 cents per pack, or 2-3 percent, while the price of Marlboro Snus will also be higher by 5 cents per can from next Monday.

In early June, Wells Fargo Securities forecasted the price increase on the basis of its previous surveys of tobacco industry trade reports.

Despite the price increase, Wells Fargo analysts consider cigarette volumes to post a solid performance within the second quarter, since wholesalers stocked up anticipating the price hike, said Bonnie Herzog, senior analyst at Wells Fargo Securities LLC.

“Overall, the latest price hike is positive and demonstrates the tobacco companies still have certain pricing power,” Herzog added. “Considering that cigarette use will continue its fall in the mid-single unit range, wise pricing strategy would be key in maintaining revenue growth.”

Besides price increase, analysts expect PM USA is set to launch new products in the nearest future.

“We predict PM USA will turn to a more aggressive market strategy - launching innovative tobacco products this year to retain its leadership in the U.S. tobacco market,” Hercog wrote.

PM USA key rivals, R.J. Reynolds and Lorillard have already announced they will also increase prices on their brands in the next several days.

R.J. Reynolds Tobacco Company confirmed it will increase list prices on its seven key brands by by 6 cents, starting from next Monday.

The list price is intended for wholesalers and direct-purchasing customers.

According to David Howard, spokesman for RJ Reynolds, the price of Camel, Kool, Salem, Winston, Doral, GPC and Pall Mall brand will be increased by 6 cents per pack, while Camel Snus, RJR’s innovative smoke-free product, will cost 10 cents per tin more, from June 18.

“We will not comment on how the price increase would impact on retail price, as we do not establish retail prices,” Howard admitted. “In conformity with our policy, we do not provide any comments regarding the company’s pricing strategy.” Nevertheless, vendors usually pass the price hike on to retail buyers, either partially or totally.

Lorillard Inc. also announced it is going to increase the list price on its brands by 8 cents.

The latest price hike is the eighth for RJ Reynolds since September 2007, as the company, as well as other cigarette manufacturers are trying to deal with decreasing consumption and growing taxes.

RJ Reynolds, carries out a careful balancing strategy on its cigarette prices. The company’s Pall Mall cigarette brand has recently become the third best-selling brand in the USA – outdistancing Camel – mainly because it is less expensive than Camel, Newport and Marlboro.

“Unless the cigarette makers don’t increase the prices sharply, consumers are likely to accept the higher prices even during difficult economic times, just like in case with other consumption products,” Bonnie Herzog noted.