US Manufacturers Profiting Unduly

Source from:  Tobacco Reporter 04/03/2009

The Council of Independent Tobacco Manufacturers of America (CITMA) has condemned major US manufacturers for increasing cigarette prices ahead of the April 1 hike in the US' federal excise tobacco taxes, which is hitting poor people disproportionately. 'Philip Morris claimed that the price increase was necessary to address floor stock taxes brought about by the Federal Excise Tax (State Children's Health Insurance Program - SCHIP) legislation passed in February 2009,' CITMA said in a press note issued by PRNewswire. 'In fact, Philip Morris's price rise was three weeks ahead of the SCHIP tax increase.' "This is just big companies using their market power to drive up their profits at the expense of adult consumers," said Kevin Altman, a CITMA representative. 'This pricing pattern is consistent with the behavior of the major tobacco companies related to the cigarette Master Settlement Agreement [MSA],' the press note said. 'After that Agreement was signed in 1999 by the states and the major companies … those companies raised prices to new highs. Profits at the major companies increased substantially and reached record levels, and all at the expense of consumers…' "This latest hike only helps promote a negative perception of the big companies leveraging the market dominance that was created for them as a result of the cigarette Master Settlement Agreement," said Altman. "Like consumers, the small independent tobacco companies who sit outside of the MSA are also punished for trying to sell cigarettes at reasonable prices to their customers, as these massive companies, in concert with the State Attorneys General, try to put … new fees and taxes on them, or even try to regulate small private manufacturers out of business. "It is time for consumers to stand up and say 'no to big tobacco', and protest these new highs in cigarette prices and fight for the rights of small companies. Consumers need to let their state and federal representatives know that they are tired of some officials representing Big Tobacco and not their constituents," added Altman. Enditem