Phillip Morris International Closes Kinston Receiving Station

Source from:  Kinston Free Press 12/14/2009

Lenoir County's tobacco farmers who had contracts with Phillip Morris International are now scrambling for income following the firm's recent announcement that it was closing its local receiving station. Graham Knott operates the station at East Carolina Tobacco Contractors on Enterprise Boulevard. He confirmed through a staff member Friday that Phillip Morris would no longer buy local tobacco there. "The only thing the growers could do is, hopefully, (get) another contract with another company," Mark Keene of the Lenoir County Cooperative Extension said. Phillip Morris International, which has its corporate offices in New York and its media office in Switzerland, is a separate entity from Virginia-based Phillip MorrisUSA. The company could not be reached for comment Friday because of the time difference with Kinston. According to its Web site, the company owns seven of the world's top 15 cigarette brands and controls 15.6 percent of the world cigarette market outside the U.S. as of 2008. In North Carolina, the tobacco auctions of the past have been replaced by contracts in recent years. Each farmer signs an individual contract with a tobacco company, which then purchases the harvested crop from an area receiving station. "Each farmer sits down with the tobacco company and they come up with a contract for what they can deliver to the receiving station," said Lenoir County grower Jack Davis, who does not hold any contracts with Phillip Morris International. B.H. Casey, also a county resident, did, though. He said Friday that PMI purchased about a third of the annual crop grown by him and his father, Blythe Casey, at its Kinston station. He said Lenoir County is the heart of the state's coastal plains tobacco-growing region. "We had the best crop, quality-wise, (in 2009) that we've had in years and years and years," Casey said. "Typically the Kinston area has a reputation for growing very good-quality tobacco, especially for the international market." Casey said he and his father were fortunate, though, because they have annual contracts with two other companies, while many other growers sold everything to Phillip Morris International. "They're really sweating it right now, if they're even going to be growing tobacco another year," he said. Casey said PMI and many other tobacco companies have one-year contracts with farmers that last from when seedlings are placed in greenhouses during the winter to when they are harvested and sold during October and early November. The contracts are typically renewed each winter, and Casey said that growers who had prior contracts with PMI could try to sell their crops at other receiving stations in the region, such as Smithfield. "There are a lot of things that could happen, or are in the works, but right now it's all speculation, on the farmers' part, anyhow," he explained. Enditem