Tobacco Shrugs Off Price Fixing Claims
NEW YORK (Reuters) - U.S. Tobacco companies on Tuesday rejected claims in a federal lawsuit filed by cigarette wholesalers and distributors alleging the industry fixed prices as nonsense and without merit.
``I certainly can tell you, in no uncertain terms, that there is no basis for a lawsuit based on price fixing allegations against our company,'' John Singleton, a spokesman for R.J. Reynolds Tobacco Holdings Corp., told Reuters.
``Our pricing practices conform to all applicable federal and state laws, and all of R.J. Reynolds' pricing decisions, including levels of pricing and timing are based on our own unilateral, independent judgement,'' he said.
The lawsuit, filed in Washington D.C., alleges the price fixing took place since at least 1993 in the domestic market and since at least 1988 in the foreign market.
A spokesman for Brown & Williamson Tobacco Corp, unit of British American Tobacco Plc, likened the suit filed by a group of class-action lawyers to a game of chance.
``This is lawsuit lottery,'' company spokesman Mark Smith said, adding that tobacco companies are ``brutally competitive ... we often talk about the 'war in the store' -- referring to the battle that goes on between cigarette companies in the marketplace.''
``This (suit) is nonsense,'' Smith said.
R.J. Reynolds and Brown & Williamson, the nation's No. 2 and 3 cigarette sellers respectively, are named in the suit filed in Washington D.C. seeking class action status along with Philip Morris Cos Inc. Lorillard Tobacco Co., a unit of Loews Corp.; and Liggett Group, a unit of Brooke Group Ltd.
Philip Morris was not immediately available for comment.
Smith and Singleton said they could not comment further because they had not seen the filing yet. But Smith added: ''After we have seen it and had the chance to digest it, we may have more to say. But I think its pretty clear that this is a frivolous'' claim.
ADRs of Brown & Williamson Tobacco Corp. were off more than 8 percent, or 3/4 to 8-1/2 -- a 10 year-low low -- in afternoon trading on the New York Stock Exchange. Shares of Philip Morris were off 1-1/8 to 19-3/8 while RJR shares were down 1/2 to 18-1/16.