Cigarette importer claims damages from rival firm

A cigarette importer yesterday filed a judicial protest holding Central Cigarette Co Ltd liable in damages after the company was found to have violated the provisions of the law regulating competition.

Interbrands Ltd (formerly Austria Tabak Malta Ltd) claimed in its protest that it was an exclusive distributor in Malta of Philip Morris cigarettes.

The two brands of cigarettes it distributed in Malta were Marlboro and L & M.

Respondent company was a subsidiary of the foreign company British American Tobacco, and it manufactured and sold Rothmans, Lucky Strike, Dunhill, Royals and Du Maurier cigarettes.

In May 2001, Interbrands Ltd had logged a complaint with the Office of Fair Competition about certain agreements that had been entered into by Central Cigarette Co Ltd and various shops.

It resulted that respondent company had agreed with shop owners in St Julians and Paceville that it would pay the owners a considerable sum of money on condition that the owners would stock only cigarettes manufactured by Central Cigarette Co Ltd.

According to these agreements, the owners had to remove the vending machines supplied by Interbrands Ltd and only install vending machines that sold respondent company's cigarettes.

Interbrands Ltd claimed that these agreements had caused it to suffer considerable financial losses.

Last month the Office of Fair Competition had found in favour of Interbrands Ltd. The Office had ruled that the agreements entered into by Central Cigarette Co Ltd were in violation of the law regulating competition.

It had also issued a compliance order in terms of which any agreement for payment by Central Cigarette Co Ltd to the owners had to be terminated within 15 days and could not be renewed.

Respondent company was furthermore prohibited from entering into further agreements of this nature.

The office also ordered that 15 per cent of the space in the vending machines of respondent company had to be allocated to any brand of cigarettes that the individual shop owner freely decided to stock and sell.

In yesterday's protest Interbrands Ltd claimed that Central Cigarette Co Ltd ought to make good the damages it had sustained as a result of the agreements which had been found to be in violation of the law governing competition.

It called upon respondent company to pay these damages.

Lawyer Simon Schembri signed the protest.