Tobacco Giant Philip Morris Reduces Fine By US$31 Million

Tobacco giant Phillip Morris has won an appeal in the Appeal Court lowering a customs violation fine slapped on them from US$34.5 million to US$3.5 million baht. The tobacco giant was fined over cigarette imports from the Philippines.

Thailand’s Criminal Court in November 2019 found the tobacco giant guilty of evading taxes and ordered it to pay the 1.2-billion-baht fine.

According to the ruling, the court dismissed the charges against seven employees due to an insufficiency of evidence. Both the company and the prosecution appealed.

On Wednesday, the Appeal Court upheld Philip Morris’ guilty verdict but reduced the fine. As part of the agreement, the authorities were instructed to pay rewards to anyone who provided tips leading to the arrests.

Philip Morris (Thailand) and seven of its employees were sued in 2016 by the Justice Department over inaccurate price declarations for cigarettes imported from the Philippines from July 2003 to June 2006. The eight defendants denied the charges.

The lawsuit alleges that Philip Morris (Thailand) set the price of L&M cigarettes imported from the Philippines at 5.88 baht, while other importers declared the same brand of cigarettes at 16.81 baht.

The tobacco giant also declared the cost, insurance, and freight (CIF) rate for Marlboro cigarettes from the Philippines at 7.76 baht per packet, far less than the 27.46 baht reported by other importers.

About Tobacco

According to the World Health Organization, tobacco is harmful in all forms, and there is no safe level of exposure to tobacco. Tobacco is most commonly used as cigarettes. There are also waterpipe tobacco, smokeless tobacco, cigars, cigarillos, roll-your-own tobacco, pipe tobacco, bidis, and kreteks.

More than 80 percent of the 1.3 billion tobacco users worldwide live in low- or middle-income countries, where the burden of tobacco-related illness and death is greatest. As a result, tobacco use contributes to poverty by diverting household spending from basic needs such as food and shelter.

In addition to the health care costs associated with treating tobacco-related diseases, the lost human capital due to tobacco-related morbidity and mortality is a significant economic cost of tobacco use.