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May the best quality win. Poll Position When surveyed about the RAI/Lorillard/ITG deal, tobacco retailers revealed plenty: 46% expect a negative impact on the cigarette competitive environment post-merger, 26% expect a positive impact and 28% expect no impact.* More than 50% believe ITG will lose cigarette share,* and 48% see a competitive disadvantage for ITG Brands.** About 25% of EDLP participants recently signed up for the program, and nearly 60% believe EDLP participation will grow with the addition of Newport.** 90% see Altrias new Retailer Leader program as a win for Altria.** 45% anticipate increasing shelf space allocations for Reynolds.** Almost 80% dont plan on changing current shelf space allocations for Philip Morris USA (whose parent company is Altria).** Retailers have become more bullish on Newports potential post-merger: They expect the brand to gain nearly 1% additional market share in 2016 (up from a 0.76% prediction in December).*** 61% of retailers describe the relative price gap between premium and deep-discount cigarettes as remaining flat, while 29% say it has widened and 10% say it has narrowed.*** *Wells Fargo Securities Tobacco Talk Retailer Survey, October 2015 **Wells Fargo Securities Tobacco Talk Retailer Survey, December 2015 ***Wells Fargo Securities Tobacco Talk Retailer Survey, January 2016 Members help make our journalism possible

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