Stakes in Bermuda's tobacco wars have continued to rise for the past month -- and so far smokers are the big winners.

Prices available for the public buying directly from the Island's new player in the cigarette business, Cassia Tobacco Company, are near cost -- just $27 a carton or $2.75 per pack.

But lawyers acting for established supplier Pitt & Company are still looking into the legality of the Cassia set-up which opened its doors for business last month.

And Pitt & Co. general manager Ken Hockenhull said yesterday he believed the Cassia's prices were only sustainable for a matter of months. But Cassia bosses remained optimistic that their business would achieve long-term success and say they will have an "exciting announcement'' next week, although they would not reveal any details of it just yet. The local industry has been fraught with turmoil for the past six months.

In October last year Pitt & Co bought out Bermuda's other supplier Tobacco Associates giving the company a monopoly in the market.

At the time Mr. Hockenhull said the declining market for cigarette products had led to the buyout. But last month two former Tobacco Associates employees Reggie Cabral and Christina Viera opened Cassia in the exact same Melbourne House premises from which Tobacco Associates had operated.

Mr. Cabral and Ms Viera are owners of the business along with Stephen Moniz and Wendell Brown.

Cassia vice president Ms Viera said that the company had also recently opened up a new outlet near Traditions.

And the public could also buy fags at greatly reduced prices from Smugglers Reef, The Supermart and Bananas on Front Street as well as any of the MarketPlace stores or the Somers Supermart in St. George's, she said.

"How we have grown shows that these retailers were all unhappy with the monopoly that Pitt & Co. had on the market,'' she said.

"Members of the public who buy directly from us have also been happy with the new cheaper supply. Cassia is going well and yes, I am confident our prices will continue to be lower because we have fewer overheads, we don't have as many trucks on the road and we don't merchandise the products.'' And she insisted the cigarettes were from the same countries as her rivals and dismissed remarks in the Press last month hinting Cassia's supply may be resold stock of lower quality.

But Mr. Hockenhull told The Royal Gazette he considered Cassia's current low prices "totally unsustainable'' and an attempt to simply buy into the market.

"They are in effect attempting to wholesale cigarettes at cost and retail cigarettes at a minimal mark up in an attempt to buy into the market. Clearly there's a conflict of interest with any wholesaler who also retails so the whole pricing situation is unsustainable.

"Pitt & Co has been around for 104 years and this latest ripple in the market is definitely not a major threat at all.'' He admitted his company had faced a little "erosion'' of the market but was confident he would hold on to more than 95 percent of buyers for the longterm.