Question-and-Answer Session
Operator
Your first question comes from David Adelman - Morgan Stanley.
David Adelman - Morgan Stanley
Marty, can you quantify the extent to which trade inventory builds from the end of the first quarters through the end of the second quarter benefited shipments this period?
Martin Orlowsky
Well, from the first the second quarter, go ahead, David.
David Taylor
Okay. So we did report a 2.1% increase in Lorillard shipments and adjusted for any kind of trade inventory change. We think that is actually a decline of roughly seven-tenth to 1%.
David Adelman - Morgan Stanley
Then the comments you made, Marty, both in the press release and in your prepared remarks regarding the lingering effect of the federal excise tax and the threat of state excise tax increases. Are you any more concerned than you would have been three months ago about those issues?
Martin Orlowsky
No, I’m not any more concerned. I just think it would be premature to reach any firm conclusions. I believe when we spoke last in about the potential of the excise tax increase, or even before that I said that, it would take several months before we would see the ultimate effects of that and I think, I believe I said that it would go through the third quarter of this year and I still continue to believe that.
I don’t think we’ve yet seen the full effects where certain brands might establish themselves relative to whatever the pricing dynamic effects are on them. So though in those terms, I’m not changing what I said before, I just think it would be premature to say today that this is the way it’s going to look.
David Adelman - Morgan Stanley
Can you characterize the competitive environment during the quarter both in general sense, and as it relates to menthol?
Martin Orlowsky
Well, I think specifically as it relates to menthol, it has continued to be fairly price competitive. We have not seen any substantial changes in terms of the competitive brand promotional patterns two in particular, are very active.
We also, as a referenced saw the beginning at the latter point of the second quarter of shipments entering into the pipeline in support of Altria’s Blend 54 promotion and once that takes effect it will be probably one of the lowest priced brands in the marketplace. So, I would describe the environment as a continuation of a fairly aggressive position by several of our competitors in the menthol category.
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