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Despite the political pall hanging over the $44.5 billion tobacco industry, Philip Morris USA is in anything but limbo.

The giant cigarette marketer rose nearly 3 points in unit share last year, to 44.8% of the market, pealing away most of the share losses at rival R.J. Reynolds Tobacco Co., down 4 share points to 26.7% of the market, according to John C. Maxwell Jr., analyst with Wheat First Butcher Singer.

The success is an outgrowth of a brave move in 1993 to cut the price on its premium Marlboro by nearly 40 cents a pack, followed by price-slashing on other premium brands.

The pricing cut deep into the market's fastest growth sector-discount brands. Discount lines have slipped from a collective 36.8% of unit sales in '93 to 32.5% last year.

PM's growth was most obvious for Marlboro. One Marlboro is smoked for every 3.6 cigarettes lit up. PM's Merit and Virginia Slims also had share gains. Only Basic, a discount brand, dropped. PM dropped Bates USA as a tobacco agency.

RJR, in cutting its prices on premiums, got little help from Winston. Camel and discount Doral, however, more than compensated for the Winston slide. RJR's discount segment (Doral, Forsyth, Monarch, Best Value, Sterling, Magma, Century) lost 15% in volume and 2.7 share points in achieving 10.8% of market unit volume, according to Mr. Maxwell.

While RJR suffered, the price cuts didn't have as a great an impact on the merged B.A.T Industries (Brown & Williamson Tobacco) and American Tobacco, the latter a former unit of American Brands. Its share held steady at 18.5%.M

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