News Release

New York, NY, January 26, 2004 – Vector Group Ltd. (NYSE: VGR) announced today that Quest, the first cigarette brand that allows smokers to transition to nicotine-free smoking, is now available in Arizona. The state accounts for approximately 1% of all cigarette sales in the United States.

Quest is designed for adult smokers who are interested in reducing their levels of nicotine intake and is available in regular and menthol flavors in three different varieties, each with decreasing amounts of nicotine – Quest 1, 2 and 3. Quest 1, the low nicotine variety, contains 0.6 milligrams of nicotine. Quest 2, the extra-low nicotine variety, contains 0.3 milligrams of nicotine. Quest 3, the nicotine-free variety, contains only trace levels of nicotine – no more than 0.05 milligrams of nicotine per cigarette. Quest cigarettes utilize a proprietary process that enables the production of nicotine-free tobacco that tastes and smokes like tobacco in conventional cigarettes.

Bennett S. LeBow, Chairman and Chief Executive Officer of Vector Group, said, “Quest is unlike any other cigarette available today and we are excited to offer this revolutionary new product to smokers in the important Arizona market.”

According to Dr. Tony Albino, Vice President of Public Health Affairs, Vector Group, who has over 30 years of experience in public health at organizations such as the American Health Foundation and Memorial Sloan Kettering Cancer Center: “We believe that reducing the levels of nicotine in Quest 1 and 2 – and eliminating it altogether in Quest 3 – is a significant achievement, which could ultimately provide a major contribution.”

Quest was first introduced in New York, New Jersey, Pennsylvania, Ohio, Indiana, Illinois and Michigan in January 2003. All six Quest varieties are available in hard packs and are priced comparable to other premium brands. The Arizona launch will be supported by an advertising and marketing campaign, with advertisements running in magazines and regional newspapers, and also by point-of-purchase campaigns.

Quest is intended for adult smokers who want to transition to nicotine-free smoking. It is not intended for smoking cessation.

For more information about Quest, please visit www.questcigs.com.

Vector Group is a holding company that indirectly owns Liggett Group Inc., Vector Tobacco Inc., and a controlling interest in New Valley Corporation.