VOL. 113 | NO. 29 | Thursday, February 11, 1999
Vending firms sue Philip Morris for
Six vending machine companies file
$100 million lawsuit against Philip Morris
Six cigarette vending machine companies have filed a $100 million class action lawsuit against Philip Morris Cos. Inc. for alleged price discrimination in the sale of cigarettes.
The suit claims Philip Morris discriminates against the vending machine owners by giving rebates, buy backs and other promotional fees to discount stores, convenience stores and other merchants.
The companies, which filed the suit in U.S. District Court in Nashville, claim Philip Morris rebate practices which the suit said can result in a wholesale price discrepancy of as much as $4.50 on a 10-pack carton caused $100 million in damages to vending companies nationwide.
The six companies are James A. Lewis d/b/a B&H Vendors of Nashville; Penn Vending Co. of Philadelphia; Belfiore Music & Cigarette Co. of Pittsburgh; Eagle Coin Machine of Pueblo, Colo.; Spartan Automatic Retailers of Memphis; and B&G Enterprises of Los Angeles.
Each of the six privately held companies has asked for $2.5 million in damages, but if the class action is approved by the court the higher $100 million damage figure would be sought by dozens of plaintiffs.
Other tobacco companies may be added as defendants to the suit by the plaintiffs, the largest of which, Penn Vending, controls 1,200 machines.
A separate effort by the vending machine companies in the U.S. Court of Claims aims to retrieve $1 billion from the federal government in compensation for a 1993 U.S. Health and Human Services Department rule calling for states to place severe restrictions on placement of the machines in order to qualify for block grant funding.