US wholesale distributor McLane posted a 65% pre-tax earnings increase for its second quarter on the back of cigarette tax increases.

The Berkshire Hathaway-owned company posted US$43m pre-tax earnings for the quarter, while pre-tax earnings in the first-half of the year fell 10% compared to 2009.

Revenue reached $8.3bn for the quarter, a 5% increase on the same quarter of the previous year. The company attributed the growth to both its grocery and foodservice businesses.

Berkshire Hathaway said results were impacted by price competition, which keeps downward pressure on margins, with gross margin falling from 5.69% in the first half of 2010 compared to 6.10% in the same period of 2009.