WINSTON-SALEM, N.C. - The price of cigarettes are going up and it??s not just because of increases in state cigarette taxes. Tobacco manufacturers are hiking the cost of cigarettes to counter a drop in demand, the Winston-Salem Journal reports.

Recently, Lorillard Tobacco Co. placed a nickel hike on its wholesale cost of Newport Menthol Tobacco, while its Newport brand saw an 11-cent jump. Other Lorillard brands registered an increase of 8 cents.

Earlier this week, R.J. Reynolds Tobacco Co. revealed wholesale and direct-buy customers would pay 9 cents more per pack on Camel, Capri, Doral, GPC, Kool, Misty, Pall Mall, Salem and Winston, among other brands, effective immediately. "We can't speculate how it might affect price at retail as we don't set the price at retail," said David Howard, Reynolds spokesman. "As is our policy, we do not comment on our pricing strategies."

Today, all Philip Morris USA brands will see a 9-cent per pack hike, according to Bonnie Herzog, managing director of beverage, tobacco and consumer research for Wells Fargo Securities LLC. "Overall, these cigarette price increases are positive, and the industry still does have pricing power," she said. "Given that consumption will likely continue to decline in the mid-single-digit range, pricing is necessary to drive top-line growth."

Meanwhile, higher prices can shift smoker loyalty from brands and stores, said Jeff Lenard, NACS spokesman. Cigarettes are among the top five of in-store purchase at convenience stores, grabbing $50.5 billion in sales last year. That number is 2.5 times the sales of packaged beverages and 3.3 times the sale of beer.

"Cigarettes are probably behind only gas in price sensitivity," said Lenard. "Consumers will leave you for a nickel a pack. And they will leave you for out of stocks. But they won't necessarily leave you if everyone else has higher prices."