U.S. cigarette maker Phillip Morris Int’l (PM) said Friday it will shut down its cigarette production at its factory in the Netherlands, the Wall Street Journal reports. The closure of the company’s largest production facility worldwide will result in 1,230 job losses, about 90% of its total workforce there. Production will move to other factories in Europe.
Philip Morris said that cigarette sales volumes have plummeted 20% in the past four years in Europe and that a recovery is “highly unlikely” due to an increase in health awareness, economic softness and as consumers shift to cheaper alternative products. The company, notes the Journal, also blamed a new “European Uniontobacco-control law that will ban menthol and other flavored cigarettes as part of broad legislation that will sharply restrict how tobacco products can be sold across the European Union”. The tougher regulatory environment, which also requires bigger warning labels on packets, is creating a fertile ground for “criminal organizations involved in the illegal cigarette trade,” the company said.
The announcement comes days after Philip Morris said it would close its Australian factory by year-end. The facility has been in operation for nearly 60 years.
Philip Morris shares are up 70 cents, or 0.84%, at $82.97 in early trading Friday.
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