In a case that may have ramifications for PHCP distributors, a federal court’s preliminary injunction in response to an antitrust lawsuit filed by 16 cigarette wholesalers against Philip Morris USA caused the cigarette maker to put a stop to a program that enabled wholesalers to receive performance discounts based upon market share targets. The wholesalers charged the discounting plan put them at an unfair disadvantage against wholesalers who qualified for the highest level of rebates.
According to ASA’s Washington, D.C. representative Patrick O’Connor of Kent & O’Connor, “This case could have implications for ASA members (wholesalers and manufacturers), but it is too early to tell. The question in the case is whether a manufacturer can intentionally discriminate in price among distributors, and whether in this case discounts and backend monies are ‘functionally available’ to all wholesalers.”