Question-and-Answer Session
Operator
Absolutely. (Operator instructions). We'll take our first question from David Adelman with Morgan Stanley.
David Adelman – Morgan Stanley
Good morning, everyone.
Susan Ivey
Good morning, David.
Tom Adams
Good morning, David.
David Adelman – Morgan Stanley
Susan, can you talk about the strategic logic long-term of focusing on a discount brand in the US market given not only the lower margin structures but also the inevitable impact of the cost disadvantage you are under whether it is versus (inaudible) manufacturers that have a carve out in the MSA or the companies that are inevitably going to operate here illegally at the bottom of the market?
Susan Ivey
Sure David. First of all, let me say that we are very pleased with the results of the Pall Mall post promotion and it was margin positive. So let us be clear about that. And we have talked about what we believe is the value to having a strong mid price offer in the market for the last five years. As prices continue to increase and consumers look for alternatives, Pall Mall is truly a unique value offer. It has grown in the last five years from 1.5 to over 5 share points and I believe the value of it actually in the overall profit pool is keeping the pricing spectrum that allows the overall profit pool to grow. And the Pall Mall promotion was successful, we gained a lot of trial obviously during the FET [ph] in post promotion period and a great number of those consumers are staying with the brand.
David Adelman – Morgan Stanley
Where do think the share like is likely to settle out under a more normalized promotional regime?
Susan Ivey
Well, we have done two pulse promotions a year on a Pall Mall for about the last three years and the post promotion was finished at the end of May. Of course, we gave back some in June, but it was over five shares in June. So we will see where it settles out David as we go into the third quarter, but significant gains in total terms.
David Adelman – Morgan Stanley
Okay. And on the smokeless side, Susan, how would you characterize sort of the magnitude of the change in the competitive environment because of the competitive premium price reductions? And in saying that, let us leave aside for the moment the financial impact of having to reduce price on Kodiak because that is just a permanent reset and the temporary absorption of the excise tax, to sort of look at it from a third quarter and going forward basis, how different is the operating environment for Grizzly than it might have been last year or the year before?
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