Archive for February, 2005

Top Story N. 12: Philip Morris International – Smoke Screen

Your distribution network is vast. You sell your product to distributors. You have no way to track what happens after that. So how can you be held accountable for how your cartons and packages hit the stores-or the street? A $1.25 billion settlement in Europe says Philip Morris International has to learn to take responsibility. Now. Your company could be next.

Formula One - FerrariPhilip Morris "can’t keep track of every single pack of cigarettes as it makes its way through distributors and retailers," U.S. compliance VP Jack Holleran says.

A $1.25 billion settlement in Europe says the global manufacturer has no other choice. Continue

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Top Story N. 11: You Pay for Your Mistakes

Smuggling, Yesterday, Today and Tomorrow

Until a few months ago R.J. Reynolds was "A criminal association under the law and in fact" (EU Official Documents), while Philip Morris was "The principal party in the recycling of money coming from drug traffic" (EU Official Documents).

Evidence of Big Tobacco
Evidence of Big Tobacco

Today, following the agreement with the European Union (Anti-Contraband and Anti-Counterfeit Agreement), signed on the 9th of July 2004, Big Tobacco has changed and has started collaborating with the police. It has promised to its new "Partners" that it will try to prevent any more cigarettes from ending up on the parallel market, which is considered one of the possible supply sources of smugglers.

In exchange, Big Tobacco seems to have asked its police "colleagues" a favor: free it from on-line commerce, from those "dangerous criminals" who sell by mail order, with legitimate customs declarations and import requests.

But the OLAF, the EU’s anti-fraud organism has neglected to make sure that Big Tobacco has really begun to control its distributors and block the supplies to the parallel market with which the cigarette makers indirectly bankroll smuggling activities. Continue

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Top Story N. 10: From the Philippines with love

The Colossus Confesses, with Proof in his Hands.

Antony Boccanfuso, attorney of the Arnold & Porter LLP Office in New York, is one of those lawyers who demolish the enemies of Philip Morris. On January 28th 2005, in his attempt to demolish Yesmoke, the lawyer informed Judge Kevin Nathaniel Fox that the exact number of containers of cigarettes manufactured by Philip Morris and sold illegally every 12 months by the on-line store amounted to 126. A little more than six million cartons a year.

Philip Morris & YesmokeThe attorney brought watertight evidence in favor of his Big Tobacco client, with which he is asking Yesmoke, based on the 126 containers per year sold online without "authorization", to pay 550 million dollars in damages.

Business is Business!

But no one seems to have noticed that out of those 126 containers, 109 arrived at Yesmoke from the factory itself, and this was a substantial share of the annual production of that factory. So the evidence provided by Boccanfuso would seem to affirm, in fact, that the manufacturer, when he sold, always knew very well which market his production was destined to.

The "proof" in the hands of Philip Morris goes beyond the recent Agreement signed with the European Economic Community (EEC) according to which Philip Morris undertakes to block any further commerce of its cigarettes outside its distribution channels, and to pay a fine of 1,200 million Dollars, in annual installments of 120 million each free of interest. It is a fine that may seem high, but for Big Tobacco it is insignificant.

The 126 containers represent a full confession of Philip Morris on the delicate theme of the so-called parallel cigarette market. It is Big Tobacco that created it, fed it and managed it. In short, it "authorized" it. Because that was its business.

(Top Story N. 10: Dalle Filippine con amore)

Il colosso confessa, prove alla mano

Antony Boccanfuso, dello studio Arnold & Porter LLP di New York, è uno di quegli avvocati che demoliscono i nemici della Philip Morris. Il 28 Gennaio 2005, allo scopo di demolire Yesmoke, il legale ha comunicato al giudice Kevin Nathaniel Fox che il numero esatto di container di sigarette prodotte da Philip Morris e vendute illegalmente ogni 12 mesi dal negozio online ammonta a 126. Poco più di 6 milioni di stecche all'anno.

Philip Morris & YesmokeIl legale porta delle prove infallibili a favore del suo cliente Big Tobacco, con le quali chiede a Yesmoke, sulla base dei 126 containers all'anno venduti online senza "autorizzazione", 550 milioni di dollari di risarcimento.

Business è Business!

Ma nessuno sembra essersi accorto che tra quei 126 container a Yesmoke ne risultano 109 arrivati dalla stessa fabbrica, che hanno costituito una sostanziosa fetta della produzione annuale di quella fabbrica. Così la prova fornita da Boccanfuso direbbe, in realtà, che il produttore quando ha venduto ha sempre saputo bene a quale mercato la sua produzione era destinata.

Le "Prove" in mano a Philip Morris vanno oltre il recente accordo firmato con la Comunità Europea con il quale Philip Morris si impegna ad impedire ogni ulteriore commercio delle proprie sigarette al di fuori dei suoi canali distributivi, e al pagamento di 1200 milioni di Dollari in rate annuali da 120 milioni, senza interessi. Una multa solo apparentemente alta, ma in realtà irrilevante per Big Tobacco.

I 126 containers rappresentano la piena confessione di Philip Morris sul delicato tema del cosiddetto mercato parallelo delle sigarette. È Big Tobacco che lo ha ideato, alimentato e gestito. In poche parole lo ha "autorizzato". Perché era il suo business.

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OLAF – Press analysis n. 7, February 2005 – “Cigarette Smuggling”

Press analysis for February 2005

Press coverage of fraud against the financial interests of the European Union, action taken to combat fraud and related matters in February focused mainly on the following: Continue

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Top Story N. 9: Smuggler Brands

Smoked by the Cops and the Robbers.

"Philip Morris and R. J. Reynolds have had a determining role in the direction, management and control of the contraband operations within the European Community .. through company directives issued at top company levels" (Official E.U. Documents).

Marlboro Cigarette Ad
Marlboro’s retail market share: $22 BILLION

Marlboros originally, were not so popular in Italy, but after 20 years of smuggling, the brand has become the unquestioned number one, eliminating the competition with its "duty-free" prices. The same thing has happened with Winston in Spain, after the division of the market with RJR.

Today Philip Morris finds itself with a business, the Marlboro brand, with an estimated worth of 22 billion dollars on a worldwide scale. "Marlboro’s retail market share is bigger than the next ten cigarette brands combined," says Jack Holleran, senior vice president of compliance and brand integrity Philip Morris USA.

Paying the European Community a "fine" of 1,200 million dollars, in convenient instalments of 10 million dollars a month, interest-free, for 10 years, Philip Morris has succeeded in crossing over to the opposite side of the barricades. And it appears to have started collaborating with the police... right in the battle against cigarette smuggling!

The "Big Tobacco Brands are a case of -- Unfair Competition and Racketeering - diabolical and continuous, at the expense of the entire world.

These cigarettes, today, no longer have any competitors; they are making a lot of money and, above all, they are smoked both by the robbers and by the police who go to the stores to buy them.

(Top Story N. 9: Sigarette contrabbandiere)

Fumate sia dalle guardie che dai ladri.

"Philip Morris e R J Reynolds hanno avuto un ruolo determinante nella direzione, gestione e controllo delle operazioni di contrabbando all'interno della Comunità Europea ... mediante direttive societarie impartite dai massimi livelli dell'azienda." (Documenti Ufficiali EU)

Pubblicità di Marlboro
Il giro d'affari delle Marlboro su scala mondiale: 22 miliardi di dollari

Le Marlboro non erano così popolari in Italia, ma dopo 20 anni di contrabbando il brand è diventato il numero uno indiscusso, avendo eliminato la concorrenza a suon di prezzi "duty-free". Come è successo per le Winston in Spagna, dopo la spartizione della torta con RJ Reynolds.

Oggi Philip Morris si trova un business, la sigaretta Marlboro, con un giro d'affari valutato in oltre 22 miliardi di dollari su scala mondiale. "La fascia di mercato delle Marlboro è maggiore delle successive 10 sigarette messe assieme", ha detto Jack Holleran, senior vice presidente del "compliance and brand integrity" della Philip Morris USA.

Pagando alla Comunità Europea una "multa" di 1200 milioni di dollari, in comode rate di 10 milioni al mese senza interessi, Philip Morris ha potuto passare dall'altra parte della barricata. E avrebbe preso a collaborare attivamente con la polizia europea... proprio contro il contrabbando!

Le sigarette di Big Tobacco sono un caso di --concorrenza sleale e "racketering"-- continuo e diabolico, alle spese del mondo intero.

Le sigarette di "Big Tobacco", ormai, dominano il mercato, non hanno la concorrenza, fanno un sacco di soldi e, soprattutto, sono fumate sia dai ladri che dalle guardie, che vanno al negozio a comperarsele.

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