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Tobacco price fix charged
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July 6, 2001: 7:07 a.m. ET
Report: Lawsuit documents show major companies met to set prices
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NEW YORK (CNNfn) - Internal documents from leading tobacco companies show a history of overseas price fixing and coordinated efforts to limit competition in various markets, according to a report published Friday.
The Wall Street Journal reported Friday that the documents were unearthed as a result of the lawsuits filed against major cigarette makers by states that were settled in 1998. The paper said the companies could now face new legal problems as anti-tobacco campaigners try to open a new legal front against the industry.
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Documents unearthed in lawsuits against tobacco companies have revealed a history of overseas price fixing by cigarette makers, according to a published report. | |
The paper cites documents showing that executives from companies including Philip Morris Cos. (MO: Research, Estimates) and British American Tobacco PLC (BTI: Research, Estimates) met to raise prices, allocate market share and limit production and advertising in various markets outside the United States.
But the article said many of the countries did not have laws against price fixing, and it quoted officials from some of the leading tobacco companies as saying they engaged in no illegal conduct.
"The activities outlined in those documents certainly were not in violation of any laws," the paper quoted Greg Prager, a Philip Morris spokesman, as saying. "In fact, in many cases, these arrangements were made with the full knowledge and support" of national governments.
Still, the Journal said the documents from the U.S. suits could inspire legal action against cigarette makers in other countries. It said that the Italian government announced it was launching a price-fixing investigation of the tobacco companies. But it said that some public health experts have been reluctant to attack the cigarette makers on price-fixing questions because of the belief that higher prices discourage smoking.
Shares of most major tobacco stocks were lower in U.S. trading Thursday. 
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