Tobacco Retailers and Companies Join Forces To Combat Anti-Competitive Practices of Market Leader
ORLANDO, Fla., Oct. 6 /PRNewswire/ -- A group of six tobacco companies and a growing number of retailers announced today that they are joining forces to seek legislative relief from anti-competitive cigarette trade practices of the tobacco industry's mark
The movement was announced here today at a press conference during the National Association of Convenience Stores' annual conference.
Simply called "Retail Rights," the effort brings together Brown & Williamson Tobacco Corporation, JT International USA, Lane Limited, Liggett Group Inc., S&M Brands and Wind River Tobacco.
"Under the Retail Rights banner, these manufacturers and thousands of retailers, are seeking state legislation," said Al Alfano, a spokesman for the group. "The alliance believes Philip Morris' and others' trade programs deprive retailers of the ability to manage the cigarette category in their own stores," he said. "These monopolistic programs exclude or limit the sale, display, advertising, discounting and promotion of other manufacturers' products, and retailers who do not accept restrictive contracts are often penalized by a denial of promotions."
"Retail Rights is a fight to open the market to fair competition and return control of the store to retailers," Alfano said. To date, nearly 13,000 retailers representing approximately 16,000 stores across the country have signed statements in support of the effort. "This growing support, and these manufacturers who are joining, reflect widespread concern throughout the tobacco industry about Philip Morris' tightening grip on retail."
Retailers speaking out on the issue:
"I've been selling cigarettes for more than 18 years and have never been treated by any other cigarette company like the way Philip Morris has in trying to push their weight around with me," said Michael Litwak, who operates the Family Bargain Shop in New Rochelle, New York.
"Philip Morris comes in and tries to ramrod my store, trying to take over my cigarette business. They start moving things around like they want us to lose every contract we have but theirs," said Vicki Grogan, manager of Tobacco Patch in Hobbs, New Mexico.
"My biggest complaint with Philip Morris is that they want to tell me how many pricing signs I can put outside my own store. They want to cut off all competitor communications. In all my years in sales, I have never seen anything like this," said Roy Buzzelli, owner of Pulaski Express in Pulaski, Virginia.
"No company should have a monopoly. Companies that don't compete fairly in today's market should face some consequences," said Larry Johnson, operator of The Depot, Odessa, Texas.
Under the proposed legislation, retailers could continue to enter into merchandising agreements with tobacco companies, as well as continue to receive display payments, slotting allowances, buy-downs, promotions and discount programs. However, the legislation would prohibit a tobacco manufacturer from imposing terms on retailers that essentially force them to relinquish control over one of the most crucial aspects of their business.
The proposed legislation also would stop manufacturers from holding retailers hostage with price promotions. Manufacturers would not be allowed to link retail discounting to their retail merchandising contract programs, which in the case of the largest cigarette manufacturer, require retailers to exclude or severely limit the sale, display, promotion, and advertising of competitors' products. "Passage of the legislation would ensure that retailers once again are able to match inventory with consumer demand," says Alfano. "Retailers also would find it more feasible to enter into merchandising agreements with all cigarette manufacturers."
Efforts are underway to pass legislation in each of the 50 states to ensure all retailers, consumers and other manufacturers are protected against monopolistic practices in cigarette sales. The proposed legislation applies only to cigarettes.
"The bottom-line of the proposed state legislation is that it would prevent Philip Morris from continuing to coerce retailers into unfavorable and anti-competitive merchandising contracts," Alfano says. "The companies are pleased to support retailers in seeking much-needed legislative relief through the political process."