Tobacco Maker UST Moves To Altria's Virginia HQ

"We think that there's a lot of fuel left in that tank to continue to drive cigarette smokers to adopt moist smokeless tobacco as part of their repertoire of tobacco products," Butler said in an interview before speaking at a country-western-themed introductory event for Altria employees that included a barbecue.

Altria hoped to enter the smokeless tobacco market on its own, capitalizing on its popular Marlboro brand with both moist smokeless tobacco and Snus, small, teabag-like pouches that users stick between their cheek and gum.

It discontinued market tests of the moist smokeless product after the UST acquisition, but it is expanding tests of Marlboro Snus to Arizona with redesigned packaging and other improvements based on customer feedback, Altria spokesman David Sutton said.

Butler said UST cut wholesale prices of its premium products about 20 percent this week to grab more market share and bring its prices closer to those of competitors.

"While we are very pleased with the success of our strategy to drive category growth in moist smokeless tobacco, we've been less than pleased with our ability to hold our share of the category," Butler said.