Tobacco giant Phillip Morris is taking competitor British American Tobacco to the High Court over unfair trading practices.
Photo: 123RF
It is accusing British American Tobacco of using unlawful trading methods to tie up retailers and restrict the availability of competitor products.
Earlier this week, a redacted press release was sent to the website Scoop, announcing that Phillip Morris New Zealand would be suing British American Tobacco New Zealand over its trading practices, which Phillip Morris said breached the Commerce Act.
A few days later the un-redacted version was leaked, detailing more explicitly why Phillip Morris had decided to sue British American Tobacco.
Phillip Morris said British American Tobacco offered cash incentives to retailers who promoted the use of their tobacco brands above all others.
According to Phillip Morris, British American Tobacco's agreement with retailers is that they must place British American Tobacco products in the top area of the tobacco cabinet and retailers must also tell them which rival brands they stock.
Phillip Morris said British American Tobacco would send 'spot-checkers' to random locations to ensure retailers were complying with the terms.
If they were not complaint, retailers would risk losing cash in.
British American said it was confident the company had not breached any laws and it would defend its position in court.
Smokefree lobby group Action on Smoking and Health said it suspected market foul-play was happening, but it never had any proof.
'Big tobacco is taking big tobacco to court'
Spokesman Boyd Broughton said it would be interesting to see what happened in court.
"For years the tobacco-control sector has thought some illegal behaviours might be going on in the way they interact with retailers but we've never had any proof and that's mainly because retailers are unwilling to share what they're being instructed to do.
"So, when it's coming from another big tobacco company it makes it all the more interesting."
But Mr Broughton said the case was still bizarre.
"Big tobacco is taking big tobacco to court, over who gets to kill the most New Zealanders."
"They're fighting over the market share, of a market that dies when using any of their products as instructed and as intended. So that's essentially what they're fighting for - they're fighting for the right to kill New Zealanders, for a bigger share of that pie."