Philip Morris USA Sues Retailers to Stop Counterfeit Cigarette Sales

Philip Morris USA (PM USA) filed lawsuits against ten retailers selling counterfeit versions of the company’s Marlboro® brand cigarettes in New York and New Jersey.

“The New York metropolitan area continues to be a lucrative market for counterfeit and contraband cigarette smugglers,” said Joe Murillo, vice president and associate general counsel, Altria Client Services, speaking on behalf of PM USA. “High excise taxes, coupled with New York state’s lack of effective tax enforcement, only makes the problem worse,” added Murillo.

“These lawsuits are the latest in a series of filings by Philip Morris USA aimed at combating the sale of counterfeit cigarettes in New York and New Jersey,” said Murillo. Since May 2009, Philip Morris has filed lawsuits against 27 retail locations in New York and New Jersey for selling counterfeit Marlboro® brand cigarettes

In addition to violating many trademark laws, counterfeit cigarettes are almost always sold without the appropriate federal and state excise tax. The counterfeit cigarettes purchased from the retailers named in today’s suits bore no tax stamp or a counterfeit tax stamp. As a result, the applicable excise taxes were not paid.

“The sale of untaxed cigarettes harms legitimate wholesale and retail businesses and costs New York and New Jersey needed tax revenues that could be used to support essential public services,” added Murillo.

“Currently, the New York legislature is debating solutions to address the state’s current fiscal crisis, including the enforcement of existing cigarette tax laws,” Murillo explained. “Estimates vary, but New York could be collecting hundreds of millions of tax dollars on cigarettes sold to non-tribal members through Native American reservation outlets. Effective tax collection could also help stabilize the legitimate cigarette distribution channel in New York, which is increasingly under attack from counterfeit and contraband cigarette smuggling,” said Murillo.

The lawsuits were filed in federal court as follows:

Philip Morris USA is an operating company of Altria Group, Inc. (NYSE: MO). More information on PM USA and its policies and positions on tobacco issues is available at www.philipmorrisusa.com.