TBO.com - TBO is Tampa Bay Online

Tobacco Giant To Spin Off Company

ADVERTISEMENT

By VINNEE TONG, The Associated Press

Published: January 31, 2008

NEW YORK - When Altria's international cigarette unit gets its independence in March, it will move quickly to grab sales outside the United States with products such as Marlboro Fresh Mint, Virginia Slims Noire and Parliament Platinum.
Altria Group said Wednesday that it will spin off its international tobacco business March 28, freeing it to pursue cigarette sales more aggressively without ties to its U.S. counterpart.

The details of the spinoff, tentatively approved by the Altria board in August, were announced as the company reported that fourth-quarter profit fell 26 percent from year-earlier results boosted by cost savings from Altria's reorganization in 2006.

Lausanne, Switzerland-based Philip Morris International has said it would rank as the biggest nongovernmental cigarette maker in the world, behind state-owned China National Tobacco. PMI also makes L&M and Bond Street cigarettes, while Philip Morris USA makes the Virginia Slims, Parliament and Basic brands for U.S. smokers.

The separation could shield Philip Morris International from U.S. legal and public relations issues, such as pressure by antismoking groups to curb sales in developing countries and a U.S. court decision in the so-called Kessler case that says PMI cannot use the "light" and "low-tar" labels to market cigarettes.

U.S. District Judge Gladys Kessler ruled that the restriction would apply to PMI, but enforcement of her decision is on hold as the case is appealed.

Critics of the spinoff say it gives the international unit the chance to unleash its marketing on nonsmoking women and children in poor, developing countries.

"Unless the predatory practices of this industry are stopped, we face an epidemic almost unlike any we've dealt with before," said Damon Moglen, vice president for international programs at the Campaign for Tobacco-Free Kids. "They're selling products at very low prices with all the marketing campaigns that were used and discredited here."

Moglen said the tobacco companies have targeted emerging economies in Eastern Europe, Latin America and especially Asia as consumers with more discretionary income take up smoking.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT