Jump to full article: Richmond (VA) Times-Dispatch, 2009-08-27
Author: David Ress
Intro: Whether he's talking Marlboro cigarettes, or Altria's recently acquired Black & Mild cigar or Copenhagen snuff lines, Hayes is on the front line of one of the fiercest battles in business.
The main battlefield is at the counters of convenience stores, drugstores and smoke shops such as Cigarettes Unlimited.
The objective is more shelf space.
The main weapon is money.
The Federal Trade Commission's latest report on cigarette sales, advertising and promotions, released last week, said major tobacco companies spent $9.2 billion on discounts to retailers and wholesalers in 2006, largely in return for shelf space. Cigarette companies keep their contracts closely guarded secrets.
The gains, sometimes, are counted in inches.
"It is amazing," Price said of salespeople for tobacco companies. "They will argue over one pack on that rack: 'He's got one more pack than I do.'" . . .
Altria will not disclose terms or incentives paid -- or, for that matter, even the number of salespeople working with retailers -- but a recent paper in the medical journal Tobacco Control estimates that roughly two-thirds of stores that sell tobacco in the U.S. have some kind of contract with Philip Morris.
Working with retailers is critical to other tobacco companies, too.
"We have to work where we are allowed as hard as possible," said Reynolds American spokeswoman Maura Payne. Reynolds, the second-biggest cigarette company also owns the second-largest smokeless company, but keeps its cigarette and smokeless sales teams separate.
Their aims are simple, even if terms of contracts and incentives are among the most closely guarded business secrets in the tobacco industry, retailers say.
"They want people walking into your store to know the product they want is in stock, that it's fresh,"
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