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Philip Morris to Stop Shipments to Illegal Sellers

January 26, 2006

CHICAGO (Reuters) – Cigarette maker Philip Morris USA on Thursday said it agreed to suspend shipments to customers that states find have illegally sold cigarettes over the Internet or by fax, mail or telephone.

The unit of Altria Group Inc. reached the agreement with attorneys general in 33 states and other jurisdictions as a way of trying to curtail illegal sales of cigarettes over the Internet and through the mail.

Opponents of these “remote” sales of cigarettes argue that they let customers avoid age restrictions for purchasing cigarettes, as well as state excise taxes.

The maker of Marlboro and other brands also said that it would reduce the volume of its cigarettes available to customers that a state determines have indirectly engaged in illegal remote sales.

It will also stop a retailer from participating in its trade programs — where retailers receive financial incentives for certain activity — if a state determines that the retailer has engaged in illegal remote selling of the company’s cigarettes.

The agreement “sets a framework for continued information sharing with law enforcement and support of their efforts to eliminate illegal sales of Philip Morris USA products,” Denise Keane, Philip Morris USA general counsel, said in a news release.

A Philip Morris spokesman did not return a phone call seeking further comment.

Altria shares were up 5 cents at $73.90 in late Thursday afternoon trading on the NYSE.


Source: reuters



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