Philip Morris to stop supplying illegal Internet dealers

Thursday, January 26th 2006, 1:12 pm

By: News On 6

ALBANY, N.Y. (AP) _ Philip Morris USA will stop supplying cigarettes to illegal Internet and mail order dealers as part of an agreement with 33 state attorneys, New York officials said Thursday.

The Richmond, Va., tobacco company voluntarily agreed to end the shipments of any of its products to customers and enterprises that the states deem illegal, New York Attorney General Eliot Spitzer said.

The action is the third prong of the states' efforts to curb the sale of cigarettes to minors over the Internet and by mail order, often avoiding substantial state sales taxes. In March, major credit card companies agreed to stop processing payments from Internet retailers. Months ago, shippers DHL and UPS Inc. agreed to stop shipping packages from the vendors.

``These illegal enterprises cannot remain in business without a steady supply of cigarettes, and thus restricting that supply can be very effective,'' said Spitzer, who leads the group of attorneys from 33 states, three territories and the District of Columbia.

Philip Morris spokeswoman Denise Keane said the agreement builds on the company's policies and programs to ``preserve the integrity of our brands and the legitimate trade channels through which they are sold.

``Our voluntary agreement ... sets a framework for continued information sharing with law enforcement and support of their efforts to eliminate illegal sales of Philip Morris USA products,'' she said.

The company has agreed to change its practices nationwide, including:

_Ending shipments to any customers the attorneys general found engaged in illegal Internet and mail order sales.

_Reducing the amount of cigarettes sold to customers that state officials find resell the product to Internet retailers.

_Suspending the incentive programs of any retailer engaged in the illegal sales.

The attorneys general consider all Internet cigarette sales to be illegal because they violate one or more state or federal laws aimed at stopping sales to underage smokers and collecting sales taxes. They said many of the sales through foreign Web sites also violate federal smuggling, cigarette labeling, money laundering and contraband laws.

The attorneys general involved represent Alabama, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Georgia, Hawaii, Idaho, Illinois, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Mexico, New Jersey, Oklahoma, Oregon, Puerto Rico, South Carolina, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin and Wyoming. Also involved are American Samoa, and the Northern Marianas.