Cigarette makers Philip Morris and Reynolds American Inc. are both expected to soon enter the smokeless-tobacco market, perhaps leveraging current brand names like Camel and Marlboro, Reuters reported Feb. 8.

As U.S. sales of cigarettes decline, and states put more restrictions on secondhand tobacco smoke, cigarette companies are looking for other ways to sell tobacco. "Our trade contacts indicate Reynolds American has already developed a product and will enter the market with Camel, possibly in conjunction with the Daytona 500 in mid-February," said Citigroup tobacco analyst Bonnie Herzog.

Big tobacco firms also have reportedly considered acquiring smokeless-tobacco firms like UST, maker of Skoal and Copenhagen, or Conwood Sales, Inc., which makes Kodiak and Grizzly.

Cigarette use has declined every year since 1981, falling from a peak of 640 billion cigarettes sold in the U.S. that year to 378 billion in 2005. At the same time, consumption of smokeless tobacco has grown.

Smokeless tobacco "doesn't have the same dangerous legal and health cloud hanging over it," said one industry analyst. "It may not be viewed as a 'healthy' product, but it's not viewed as a deadly product like cigarettes."

"It is clear that smokeless is a growing category," said Susan Ivey, chairman and chief executive of Reynolds American. "I would not want to comment on how we would or would not get engaged in that until we have something concrete." Philip Morris executives have also expressed interest in "adjacent" tobacco businesses. "You can clearly expect a lot of activity in the coming months," said Louis Camilleri, chairman and CEO of parent company Altria.