Philip Morris reports losses while market position gains

Philip Morris (PM), the largest producer of tobacco goods in Poland, recorded a 56.6% drop in profits last year compared to 1999. Similar sharp declines in profit have struck the nation's entire tobacco industry. Multiple increases in excise tax on tobacco goods have stimulated increased smuggling of cigarettes from the countries of the former Soviet Union. Jacek Olczak, PM director of sales and distribution and a member of the company's board, explained that the drastic drop in legal sale of tobacco goods was predictable, considering the scale and pace of excise increases. Despite such a dramatic decrease in sales, PM improved its position on the Polish market, climbing from 31.9% control of the sector in 1999 to 33.3% last year, largely as the result of the introduction of a new brand of cigarettes and strengthening the position of those already present. PM has invested $500 million in Poland since 1996. (Puls Biznesu, p.4) A.D.