Philip Morris Hands UK Marlboro Distribution to Imperial

15 August 2001

Distribution within Britain of Marlboro cigarettes – made by US tobacco giant Philip Morris – will next month be taken over by Imperial Tobacco.

The brand accounted for 6% of the legal cigarette market in the UK in 2000, well below the 37% share it enjoys in western Europe. Imperial owns Britain’s best-selling cigarettes Lambert & Butler, and the Marlboro deal is expected to add £10–£20 million to the company’s £626m profits before tax and interest this year.

Marlboro is currently distributed by a joint venture between Philip Morris and Rothmans. However, in 1999 British American Tobacco took over Rothmans’ tobacco operations rendering, so Philip Morris argued, the distribution contract void.

Following a protracted legal struggle, the Court of Appeal last month upheld a ruling that Philip Morris could withdraw from the Rothmans agreement. The subsequent deal with Imperial will, enthused Hans Fleuri, president of Philip Morris in the European Union, “enable us to sustain and accelerate the growth of Marlboro in a key European market.”

News source: Financial Times