November 23, 2010 - Philip Morris International (PMI) responded today, November 20th to comments reported in the media concerning a Bilateral Investment Treaty (BIT) claim filed by PMI's affiliates against the government of Uruguay. Many of these reports are misleading and omit important facts about tobacco regulations in Uruguay and our lawsuit.
Background: November 17, 2010 - Mayor Bloomberg made the donation to help Uruguay's anti-smoking groups fend off lawsuits brought on by the massive tobacco corporations. He said his money "will assist Uruguayan government officials by providing legal research and expertise, launching public education mass media campaigns, and galvanizing world support and public opinion." New York City Mayor Michael Bloomberg gives $500,000 to defend anti-smoking laws in Uruguay..;PMI is not seeking to prevent the government from protecting the health of its citizens. The regulations we are challenging are extreme and ineffective measures that have created an environment conducive to the black market in cigarettes. According to the Tobacco Atlas 2009, Uruguay already has the fourth highest incidence of contraband cigarettes in the world. Recent studies confirm that consumption of contraband cigarettes is equivalent to over 25% of all cigarettes sold in Uruguay.
November 15-20, 2010 - The fourth session of the Conference of the Parties to the WHO Framework Convention on Tobacco Control (WHO FCTC) is being held at the conference centre of the Conrad Hotel in Punta del Este, Uruguay. The President Jose Mujica spoke at the opening of a summit and described described Uruguay as a "laboratory of confrontation" with Big Tobacco. Philip Morris International Inc. is pursuing a claim before World Bank arbitrators alleging that Uruguay is violating its trade agreement with Switzerland by requiring that anti-smoking warnings cover 80 percent of cigarette packages. (Uruguay - WHO FCTC meeting of the parties, Nov. 15th - Nov. 20th..)
Earlier this year PMI filed for arbitration at the World Bank's international centre for settlement of investment disputes (ICSID), claiming the restrictions hurt its business and violated Uruguay's trade deal with Switzerland. (Uruguay - has promised to water down anti-smoking laws after pressure from the tobacco giant Philip Morris International)
Independent summary of PMI's claims: Uruguay: Philip Morris files first-known investment treaty claim against tobacco regulations by Luke Eric Peterson, 3/3/2010.
More: Part Three: Uruguay vs. Philip Morris Tobacco Giant Wages Legal Fight over South America’s Toughest Smoking Controls..
Euromonitor: Tobacco in Uruguay..
One example of these extreme and ineffective regulations is the 2009 ordinance that forced companies to withdraw all but one pack variation per cigarette brand. PMI complied pulling 7 out of 12 brand varieties from the market, including Marlboro variants representing 40% of Marlboro sales. On the other hand, the local Uruguayan tobacco company with 77% market share merely renamed its existing brand variants, keeping all of its packs on the market. The government has done nothing to enforce the law against the local company which has evaded it, while PMI, which has complied fully, has suffered substantial damages resulting from the removal of many of our well known international brands.
Commenting on the case, Even Hurwitz, Senior Vice President Corporate Affairs, PMI said, "Our lawsuit is not a question of public health versus business. We are challenging regulations which are not fairly applied to all companies, add further fuel to Uruguay's huge black market in cigarettes and have not even been shown to reduce smoking prevalence."
Contrary to some media reports PMI is not seeking and did not file lawsuits to overturn public place smoking restrictions, lift advertising restrictions, prevent all graphic warnings on cigarette packs or reverse bans on descriptors such as "milds" or "lights".
Reference: Philip Morris International Responds to Blatant Mischaracterization of Uruguayan Lawsuit, SOURCE: Philip Morris International, 11/20/2010.