General Tobacco plans to shut down operations after failing to make payments it owed to states under the Master Settlement Agreement (MSA), reports The Wall Street Journal.

General Tobacco, a maker of low-priced cigarettes that became the sixth-largest U.S. tobacco company during the last decade, stopped producing cigarettes and other tobacco products at its North Carolina plant several months ago and is winding down operations.
J. Ronald Denman, executive vice president and general counsel, told the newspaper, that the company recently has been selling off inventory in foreign markets.
General Tobacco, a closely held company, which is formally called Vibo Corp., produced brands such as Bronco, Silver and GT One. After it began selling cigarettes in 2000, it quickly gained market share from larger rivals  with annual sales reaching USD 335 million by 2004.
But its U.S. market share fell from almost 2 per cent to less than 1 per cent in recent years, amid intense competition from other discounters and the demands of the MSA, the landmark pact between 46 state attorneys general and cigarette makers.
General Tobacco joined the accord in 2004, and agreed to make payments to the states for both ongoing sales and those it recorded prior to joining the agreement.
The company has made about USD 600 million in payments to states, the report said, but early this year, Washington, North Carolina and other states barred the company from selling cigarettes because it had not made certain payments for cigarette sales prior to 2004. The bans did not affect filtered cigars and roll-your-own tobacco sold by the company.
Denman said General Tobacco has informed states that it will not be able to make the back payments.
Under the USD 206 billion agreement, companies agree to marketing restrictions and make payments to reimburse states for the costs of caring for sick smokers. (pi)