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Last Updated: Jan 31st, 2007 - 10:58:43 |
Philip Morris slashes prices in Spain
Jan 28, 2006, 15:52
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MADRID - Marlboro cigarettes were always something of a status symbol for smokers in Spain, costing more than top local brands. Suddenly they are cheaper - a gut punch to the rest of the industry and the government's drive to curb smoking. Last week, the Socialist government raised taxes on cigarette manufacturers in response to what it called a flood of cut-rate brands allegedly targeting younger smokers. Spain's top manufacturer, Altadis, responded by raising prices. But Philip Morris USA shocked everyone Thursday by lowering prices for Marlboro by around 15 percent and making similar cuts for two other brands in Spain, infuriating consumer groups, doctors and even cigarette vendors fretting over lower revenue. ''We are on strike. People are angry,'' said Laura Martin, who runs one of Spain's many state-regulated tobacco shops. She said she and many colleagues in Madrid were protesting by refusing to sell Philip Morris products Friday. As Martin spoke, a customer came in asking for Marlboro and she sent him away saying she was out of it, which she insisted was true. ''But even if I had it, I would not sell it,'' Martin said. Had Philip Morris simply wanted to pass on the tax increase to consumers, its Marlboro price would have gone up by about 12 cents. Instead, it lowered the price by 50 cents to $2.90, compared to the new, higher price of $3 for Fortuna, the leading Altadis brand and Marlboro's main competitor in Spain. Marlboro is the top-selling cigarette in Spain. Still, smoking remains comparatively cheap in Spain. A pack of Marlboro goes for $4.63 in Italy, $6 in France and $9 in Britain. In the United States, in mid-Manhattan, a pack of Marlboros ranges from $6.80 to $7.40 depending on the type. Consumer groups accused Philip Morris - part of Richmond, Va.-based Altria Group Inc. - of encouraging people to smoke and urged the government to raise taxes even more. Philip Morris International spokesman Tommaso Di Giovanni said the firm shares the government's concerns but believes the recent tax hikes will not help stem sales of cheap cigarettes.
© Copyright 2006 by CigarettesOn.Com
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