Philip Morris USA Sues Retailer for Counterfeit Cigarettes

RICHMOND, Va. -- Altria Group's Philip Morris USA (PM USA) filed a lawsuit last week in a U. S. District Court against Mastic, N.Y.-based G Talks Smoke Shop, alleging the company sold counterfeit versions of the company’s Marlboro brand cigarettes.

PM USA’s action follows purchases last week of 30 packs of reportedly counterfeit cigarettes at G Talks Smoke Shop, made by company investigators, as well as a seizure at the location by Suffolk County Police on the same day as the lawsuit's filing, of an additional 30 packs of counterfeit cigarettes bearing Marlboro brand trademarks.

These latest seizures are in addition to the 4,870 packs of counterfeit PM USA cigarettes seized on the Poospatuck reservation in 2009-2010, according to the company.

Last week's lawsuit is aimed at stopping the sale of counterfeit cigarettes and the unauthorized use of PM USA’s trademarks, the tobacco company stated.

“The sale of counterfeit cigarettes undermines the value of Philip Morris USA’s brands and the legitimate channels through which our products are distributed and sold,” Joe Murillo, vice president and associate general counsel, Altria Client Services, said in a statement issued on behalf of PM USA. “Selling counterfeit cigarettes is illegal, and we will take appropriate action to protect our brands.”

In New York, increased contraband activity is being fuelled by having the highest excise tax in the United States, at $4.35 per pack, combined with the state’s continued lack of collection of excise taxes on cigarettes sold to non-Native Americans through Native American reservations, the company stated.

Tax-free cigarettes are sold through around 200 outlets affiliated with tribal reservations, which has led to these outlets selling about one-third of the cigarettes sold in New York, PM USA stated.

PM USA advocates for legislative and regulatory solutions to the state's contraband cigarette problem.

“These continuing contraband issues in New York are an affront to legitimate business and are unacceptable to us and our consumers. We continue to urge the governor to follow through on proposed regulations that would result in collection of taxes on cigarettes sold through Native American reservations starting on Sept. 1. And we also urge the Governor to sign legislation passed by the New York Legislature S.8316/A.11535, to ensure that all compacts receive the Legislature’s review and approval,” Murillo added.

Including this new lawsuit, PM USA currently has 16 counterfeit retailer lawsuits pending in the New York area against 39 defendants, all of whom allegedly sold counterfeit items in 2009 and 2010, according to the company. In Mastic specifically, PM USA has filed four cases against eight defendants during 2009-2010.

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