Philip Morris Tobacco Antitrust Suit Dismissed By Federal Judge
Winston-Salem, North Carolina, May 1 (Bloomberg) -- Philip Morris Cos. won a dismissal of antitrust lawsuits brought by competitors who claimed the world's largest cigarette maker kept other brands from being displayed prominently in stores.
The suits, brought by R.J. Reynolds Tobacco Holdings Inc., Brown & Williamson Tobacco Corp., and Liggett Group Inc., claimed Philip Morris made sure its Marlboro brand was displayed, while their cigarettes were out of sight.
In an opinion today, U.S. District Judge Frank Bullock in North Carolina threw out the case, granting Philip Morris' motion for summary judgment.
``Plaintiffs failed to establish an antitrust injury,'' Bullock wrote. ``No evidence indicates that Plaintiffs' losses, if any, are a result of anticompetitive activity associated with'' Philip Morris.
Winston-Salem-based R.J. Reynolds, the second-largest cigarette maker with brands including Camel and Winston, claimed Philip Morris engages in anti-competitive marketing tactics by rewarding retailers with price promotions if they agree to give Marlboro and other Philip Morris brands prime shelf space.
In a statement today, R.J. Reynolds said it was ``considering its options.''
Under its Retail Leaders Program, Philip Morris gives retailers discounts and promotional allowances if they agree to set levels of display of the company's brands to the exclusion of competing brands, the suit claimed.
Because of Philip Morris's dominance, retailers are essentially forced to go along with Philip Morris's exclusionary marketing agreements, the suit claimed. The result is that competitors have virtually no chance of winning over the typical cigarette consumer, the suit said.
Liggett is a unit of Miami-based Vector Group, and Brown & Williamson is a unit of U.K.-based British American Tobacco Plc.
Philip Morris shares rose 94 cents to $55.37; R.J. Reynolds rose $1.10 to $70.30; British American Tobacco's American depositary receipts rose 62 cents to $20.92; and Vector rose one cent to $21.16.