July 1 (Bloomberg) -- Philip Morris CR AS has started to reflect a January increase in the Czech excise tax by raising prices of cigarettes, Mlada Fronta Dnes reported.

Imperial Tobacco CR, Philip Morris's competitor, expects to raise its retail prices by the end of September, the newspaper said, citing company official Kamil Provaznik.

Companies have so far kept prices lower by selling cheaper stocks and cutting profit margins, the newspaper reported.

To contact the reporter on this story: Marketa Fiserova in Prague mfiserova@bloomberg.net

Last Updated: July 1, 2008 01:42 EDT