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GERMANY

Philip Morris leaves manufacturers' association

17 May 2007. Philip Morris GmbH will leave the Association of German Cigarette Manufacturers (Verband der Cigarettenindustrie) at the end of 2007.

The company’s managing director, Jacek Olczak, announced the withdrawal at a board meeting on Monday, saying that "the members of the cigarette manufacturers’ association have different opinions on important questions concerning our industry.”

Philip Morris supports tighter restrictions on advertisement bans as well as raising the minimum content of a pack of cigarettes from 17 to 20 and said it offers its cooperation to the public authorities and public health institutions. Philip Morris further supports a tax increase for roll-your-own tobacco and cigarillos to the tax levels of cigarettes.

Different views on the effectiveness of further tax increases to regulate consumption was reportedly one of the main disagreements between Philip Morris and the other association members, which are BAT (Germany), Imperial’s subsidiary Reemtsma Cigarettenfabriken, JT International Germany, Tabak- und Cigarettenfabrik Heintz van Landewyck and Joh. Wilh. von Eicken GmbH.

In a 15 May press release, the remaining association members maintain that additional taxation would only serve to boost the illegal trade of cigarettes even further.

Although there have been signs of disagreement among association members in the past, the withdrawal came as a surprise to many in the industry. The association’s chairman, Titus Wouda Kuipers, said that they will remain effective without Philip Morris.

Philip Morris has a market share in Germany of 37 per cent.