Philip Morris Limited and Independent Retailer Announce Joint Lawsuit Challenging Irish Tobacco Display Ban

DUBLIN--(BUSINESS WIRE)--Philip Morris Limited (PML), Philip Morris Products S.A. (PMPSA) and Maurice Timony, an independent retailer from Donegal, have announced that they will file a joint lawsuit seeking to overturn the ban on display of tobacco products at retail stores in Ireland.

“We know from our experience in Iceland that a total ban on tobacco display does not work, is costly to implement and ineffective at reducing smoking levels”

The lawsuit will be filed before the High Court in Dublin on October 6, 2009. Plaintiffs will be challenging the tobacco display ban on the grounds that it severely restricts their ability to provide trade and services thus violating Irish constitutional law and EU law. The tobacco display ban came into effect in Ireland on July 1, 2009. Outside Ireland, a display ban exists in Iceland as well as some provinces of Canada.

“We know from our experience in Iceland that a total ban on tobacco display does not work, is costly to implement and ineffective at reducing smoking levels,” said Anne Edwards, spokesperson for PML. “We support strict tobacco regulation, but this legislation just serves to hand the tobacco business over to smugglers and counterfeiters. Ireland already has one of the worst illegal cigarette problems in the EU, and this ban is making it worse. No one likes to litigate, but we have unfortunately arrived at a point where we see no alternative. By taking this action, we ask the Irish government, ‘what type of industry do you want?’ One that is legitimate, and supports effective regulation, or one that is run by criminal gangs selling cheap, illegal cigarettes on street corners?’”

Commenting on his decision to challenge the ban, Mr. Maurice Timony, owner of Timony News in Donegal, said, “I am a licensed retailer who pays a license fee to the government to sell tobacco products. Currently, the country is swamped in legislation that is making life very difficult for compliant retailers like me. The ban on display of cigarettes is just one example of a piece of over regulation that has not been well thought through and has negatively affected my business. As a compliant, law-abiding retailer I have a responsibility to my employees to make sure that I can continue to employ them going forward. Simply put, ‘enough is enough.’ The display ban threatens my business and I have therefore decided to take a stand against it.”

The plaintiffs are not seeking changes to the law prohibiting smoking in public places or that prohibit tobacco advertising. The goal of the lawsuit is to allow licensed tobacconists and retailers to display tobacco products in their stores.

Philip Morris International

Philip Morris International (PMI) [NYSE/Euronext Paris: PM] is the leading international tobacco company, with seven of the world’s top 15 brands including Marlboro, the number one cigarette brand worldwide. PMI has more than 75,000 employees and its products are sold in approximately 160 countries. In 2008, the Company held an estimated 15.6% share of the total international cigarette market outside of the United States. For more information, see www.pmintl.com.

Timony News

Timony News is a retail outlet and licensed tobacconist in Donegal, Ireland, owned by Maurice Timony.

Display ban in Ireland

The ban on the display of tobacco products at the point of sale entered into force on July 1, 2009. The ban means that no tobacco products can be displayed in shops and therefore cannot be seen by customers.

Illicit trade in Ireland

A 2008 survey commissioned by Philip Morris showed that 29.3% of cigarettes found in Ireland were non-domestic, the highest level in the EU.

Experience from Canada

In 2008 it is estimated about 13 billion illegal cigarettes were sold in Canada causing a loss to governments of over $2 billion in tax revenues. As in other countries illegal cigarettes do not comply with local legislation and are sold cheaply to adults and children alike. Illegal tobacco sales support organized crime networks and their presence in the market causes legitimate retailers to lose business.

Source: A national study for the Canadian Tobacco Manufacturers’ Council conducted by GfK.

Experience from Iceland

A study conducted at the request of Philip Morris International by LECG, a leading finance and economic consultancy, shows that the point of sale display ban in Iceland has had no statistically significant effect on reducing smoking prevalence.

Website

Philip Morris International is today launching a website, www.productdisplayban.com in order to provide factual information on the prohibition of the display of tobacco products at point of sale and describe its effects on public health, adult smokers, retailers, tobacco manufacturers and enforcement agencies.