Tag: Philip Morris

  • Tobacco Firms Settle MSA Dispute

    Tobacco Firms Settle MSA Dispute

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    Tobacco companies will pay Massachusetts hundreds of millions of dollars to settle a dispute about how much the cigarette manufacturers owe the state.

    The deal ends a dispute stemming from the 1998 Master Settlement Agreement (MSA) in which tobacco companies agreed to pay states billions of dollars each year to offset medical expenses stemming from smoking.

    Claiming that some MSA signatories withheld “substantial funds,” the Massachusetts attorney general’s office sent disputes over hundreds of millions of dollars into arbitration.

    Monday’s announced deal resolves seven of those past disputes for 2005 through 2011, the office said, and will result in $600 million being paid to the commonwealth this year and “tens of millions” each year going forward.

    “The country’s major tobacco manufacturers have pushed smoking products to young people for decades—and this settlement is evidence of our ongoing commitment to hold these companies accountable for their actions that caused irreparable harm to public health and safety,” said Massachusetts Attorney General Andrea Joy Campbell in a statement.

  • PMI Urges Action Against Illicit Trade

    PMI Urges Action Against Illicit Trade

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    Philip Morris Pakistan Limited (PMPKL) has urged action against the growing presence of tax-avoiding products on the country’s tobacco market, reports  The Express Tribune

    In a media briefing, PMPKL Head of Communications Andleeb Uroos Ahmed said the company’s income had plunged by 86 percent in 2023. He attributed the decline to last year’s hike in Federal Excise Duty (FED), which doubled cigarette prices, and the subsequent escalation in market share of illicit products.

    This condition has provided an ample opportunity for numerous local illicit cigarette manufacturers, notably in Khyber Pakhtunkhwa and Azad Jammu & Kashmir, to amass substantial market share while contributing minimally to national revenue, according to critics of the tax hike.

    Illicit cigarettes now command a 63 percent market share, causing the exchequer to miss out on  PKR310 billion ($1.11 billion) in tax collections annually.

    While acknowledging government efforts such as the introduction of tax stamps, Ahmed expressed concern about lax enforcement.

    Stressing the interests of tax-paying companies and government’s need for sustainable revenue, she suggested including tax-evading cigarette manufacturers in the tax net instead of burdening the legitimate industry with additional taxes.

    By curtailing tax evasion, she calculated, the Federal Board of Revenue (FBR) can potentially boost revenue collection from the tobacco sector by more than $2 billion.

    “The potential revenue, if realized, could significantly contribute to human development projects and public health initiatives in Pakistan, addressing critical areas where the country lags in human development rankings,” she added.

    She said that anti-tobacco organizations have been misguiding the government by spreading misinformation about the revenue collection potential from the legitimate tobacco industry.

  • California Firm Sues Zyn Makers

    California Firm Sues Zyn Makers

    Tobacco Reporter archives

    A law group in California has filed a lawsuit against Philip Morris in the state’s Southern District. The Schmidt National Law Group claims that the maker of Zyn is targeting children and young adults with its flavored nicotine pouches.

    “Now comes along Zyn the chewing gum, and the common denominator of all these nicotine delivery systems is as far as targeting towards kids, and I’m talking about kids, middle school, high school, younger and younger,” said Martin Schmidt, managing attorney at The Schmidt National Law Group.

    Although a person must be at least 21 years old to purchase the product legally, Schmidt says it is very accessible to people younger than 21. The class action lawsuit seeks “damages” from Philip Morris and Schmidt said he would like stricter limits on access to the product, according to media reports.

    The case could take years to work its way through the litigation process, according to Schmidt.

  • Egypt: Philip Morris Cleans Up Nile River

    Egypt: Philip Morris Cleans Up Nile River

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    Philip Morris Misr organized a campaign to clean up the Nile River as part of its social responsibility initiatives, according to Daily News Egypt. The campaign aimed to raise awareness of the importance of protecting the Nile River from pollution and enhancing environmental sustainability.

    “Our corporate strategy is based on implementing and consolidating sustainability standards,” said Ali N. Karaman, managing director of Philip Morris Egypt and Levant. “We are committed to fulfilling our social responsibility by engaging in activities that serve the needs and requirements of the local communities. Philip Morris Misr is keen to organize annual events that promote environmental awareness.”

    The campaign included various activities to collect waste from the Nile River and educate people on proper waste disposal methods, aiming to highlight negative impacts of water pollution.

    Philip Morris has strengthened its commitment to environmental sustainability recently, with plans to make plants carbon neutral by 2030. Philip Morris has made steps toward this goal, installing wind turbines, solar panels and electric vehicle charging stations at its facilities and performing awareness activities on proper disposal of cigarettes.

  • Kaival Brands Earns Initial Royalties from Philip Morris

    Kaival Brands Earns Initial Royalties from Philip Morris

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    Kaival Brands Innovations Group, parent to Bidi Vapor, received its first royalty payments from Philip Morris International for marketing Bidi Vapor products in multiple countries.

    In a press release, Kaival Brands announced that PMI achieved a record level of monthly sales in July for its Bidi products that are marketed by PMI under the names VEEBA and VEEV NOW.

    Eric Mosser, CEO and president of Kaival Brands, said he was pleased to see the positive trajectory of sales and royalties to the company.

    “We are proud to work with Philip Morris and remain steadfast in our commitment to the responsible commercialization of better alternatives to cigarettes for adults who would otherwise continue smoking,” he said.

  • Kaival Amends Philip Morris Deal

    Kaival Amends Philip Morris Deal

    Credit: More

    Kaival Brands International (KBI) has amended its agreement with Philip Morris Products, a wholly owned affiliate of Philip Morris International, for the development and distribution of electronic nicotine-delivery system products in markets outside of the U.S.

    Eric Mosser, CEO of Kaival Brands, the exclusive distributor of all products manufactured by Bidi Vapor, said in a press note that with more than a year of operational history for KBI and given the recent changes to regulations in international markets, it became clear that there were a number of opportunities to improve the terms of the original licensing agreement with PMI and reduce the burden of administering it.

    “We are extremely pleased to reach an agreement that shall enable us to achieve our objectives. The revised licensing agreement simplifies the payment structure resulting in cost savings of approximately $2.7 million for the company over the lifetime of the license agreement,” said Mosser. “It also enables better predictability and forecasting for KBI and streamlines data reporting. Finally, we anticipate that the acceleration of royalty payments will be a net positive to our financial performance over the duration of the agreement.”

    Under the terms of the amended agreement, the parties agreed to revise certain terms, which provide for, among other things, a fixed pricing structure with volume-driven increases and a recapture of nonrecurring engineering costs by KBI.

    Accordingly, Kaival Brands expects a reconciliation payment of approximately $135,000. It projects approximately $300,000 in additional royalties to be earned through the end of 2023.

  • North Carolina Revenue Department Disputes Philip Morris in Tax Litigation

    North Carolina Revenue Department Disputes Philip Morris in Tax Litigation

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    Philip Morris is engaged in a legal battle with the North Carolina Department of Revenue over an $8.7 million tax bill, reports The Carolina Journal. Philip Morris argues that it should be able to claim $7.2 million in tax credits, but the department disagrees.

    The dispute centers on the interpretation of a phrase in the state law, with Philip Morris claiming that the law does not limit the amount of credit that can be generated in a given year. The revenue department argues that Philip Morris exceeded the $6 million cap on credits and improperly carried them forward to subsequent tax returns.

    “Philip Morris argues the decision in the case will be determined by the meaning of the phrase ‘credit allowed’ found in N.C. Gen. Stat. § 105-130.45. However, this case is about the meaning of six words added to N.C. Gen. Stat. § 105-130.45(b) during a special session convened by the General Assembly,” according to a brief filed by N.C. Department of Justice lawyers. They represent the Department of Revenue in the tax dispute.

    “The words ‘may not exceed 6 million dollars’ specifically limited the amount of credits a taxpayer could generate on the exportation of cigarettes,” state lawyers wrote. “The amendment did not disturb the separate and preexisting cap on the amount of credits that a taxpayer could use on its tax return during a single year in subsection (c). Despite a plain reading of the amended language, Philip Morris contends that subsection (b) does not limit the amount of credit that can be generated in any given year and only limits the amount that can be claimed in a tax year. Thus, Philip Morris continued to incorrectly generate credits in excess of the $6 million cap.”

    “For tax years 2005, 2006 and 2007, Philip Morris calculated its export credits generated in the amount of $28,767,799; $27,374,957; and $14,310,414, respectively, far exceeding the $6,000,000 limit,” according to the brief. “Philip Morris then improperly attempted to carry forward the unauthorized credits to its 2013 and 2014 corporate tax returns.”

    “Through this appeal, Philip Morris now continues to lobby for better treatment than its competitor R.J. Reynolds by attempting to question the statutory construction of an unambiguous statute,” the revenue department’s lawyers argued.

    Philip Morris argues that the department’s interpretation of the law is a recent development and not supported by legislative history.

    The state Supreme Court is yet to issue a ruling in the case.

  • Anger Over Subsidies for Dutch Cig Factory

    Anger Over Subsidies for Dutch Cig Factory

    Image: Tobacco Reporter archive

    Members of Parliament are angry that Philip Morris received a €268,000 ($296,059) subsidy from the Dutch government in 2021, reports Dutch News.

    The subsidy was to help Philip Morris’ Bergen op Zoom factory, which produces components for tobacco-based cigarettes and electronic cigarettes, become more sustainable. The money came from the economic affairs ministry’s fund to help companies cut carbon dioxide emissions.

    “This is an example of why we want tough rules for these sorts of factories,” said GroenLinks Member of Parliament Suzanne Kroeger.

    “It is absurd that we are making money available to make factories we want to see closed down more sustainable.”

    Philip Morris refunded the money later that year after deciding not to carry out the work.

  • Egypt: PM Cigarette Prices Increase

    Egypt: PM Cigarette Prices Increase

    Image: Tobacco Reporter archive

    Prices of 10 types of Philip Morris cigarettes have been raised in Egypt, the Tobacco Division of the Chamber of Commerce announced. The increase went into effect April 6, according to the Egypt Independent.  

    The increase is attributed to the rise in U.S. dollar price against the Egyptian pound. Ibrahim Imbaby, head of the Tobacco Division at the Chamber of Food Industries with the Federation of Egyptian Industries, confirmed that Philip Morris raised prices as a result of the decline in hard currency management and the rise in production costs.