Altria a tobacco giant with monopolistic characteristics - to encourage competition should Altria be split up..

May 31, 2009 - U.S. Assistant Attorney General Christine Varney in charge of the Department of Justice's Antitrust Division claims that the Bush era policies weakened the anti-trust department's ability to keep companies from getting too large. She has essentially retracted a September 2008 report that amended Section 2 of the Sherman Antitrust Act. The memo had loosened the rules which deemed it illegal to make any attempt at creating a monopoly. "The report...raised too many hurdles to government antitrust enforcementh" Varney said. "Withdrawing the report is a shift in philosophy and the clearest way to let everyone know that the Antitrust Division will be aggressively pursuing cases where monopolists try to use their dominance in the marketplace to stifle competition and harm consumers.

It seems like the last half of this statement describes Altria - now involved in all facets of the tobacco industry. Here's Michael E. Szymanczyk, Chairman and Chief Executive Officer of Altria, "With the acquisition of UST, Altria has been transformed into the premier tobacco company in the United States. “Our tobacco operating companies have four powerful brands, Marlboro, Copenhagen, Skoal and Black & Mild, which are leaders in the largest and most profitable domestic tobacco categories.

Altria provides more than one in every two cigarettes sold in the U.S., almost two-thirds of the moist snuff and has the best selling machine-made large cigar, Back&Mild with an ever growing 28.5% market share and growing. U.S. Center for Disase Control & Prevention found that Back&Mild are the preferred cigar of young African Americans at 56%. Ed Roberson, a former Conwood president told the Maryland House Economic Matters Committee: "Philip Morris has a 75 percent monopolistic market share with moist snuff. And they want you, the legislature, to protect that market share."

Altria played a pivotal role in writing the legislation for the FDA to regulate tobacco working with Campaign for Tobacco-Free Kids. What these strange bedfellows came up with is bad for competition in the tobacco industry. Reynolds American Inc. and Lorillard Inc. the smaller manufacturers oppose restrictions they say would perpetuate Philip Morris’s position as the market leader. Fortune magazine has even labeled the legislation to regulate tobacco, "Altria Earnings Protection Act."

A very similar scenario played out in the late 19th-century/early twentieth century when Buck Duke's American Tobacco Company had earned a substantial market, employed aggressive sales tactics, through mergers, internal efficiency and low prices lead to the breakup of this tobacco giant. James Buchanan Duke.

Maybe it's time for the U.S. Assistant Attorney General Christine Varney to take a close look at Altria and its subsidiaries.
TobaccoWatch.org

References: JUSTICE DEPARTMENT WITHDRAWS REPORT ON ANTITRUST
MONOPOLY LAW, U.S Department of Justice, 5/11/2009; Snuff makes strange bedfellows
Proposal to change taxes puts cancer society, R.J. Reynolds on same side by Gadi Dechter, Baltimore Sun, 5/25/2009; Obama vows antitrust crackdown Justice Department official reverses Bush administration report that limited government's ability to pursue antitrust violations. by David Goldman, CNNMoney.com, 5/11/2009.