Some Georgia tobacco growers find themselves abruptly facing uncertainty as far as tobacco production in 2010 is concerned. Philip Morris USA is closing its buying station in Alma, Georgia. In addition, in an unrelated situation, Philip Morris International is closing a buying station in Kinston, N.C., notes Graham Boyd, executive vice president of the Tobacco Growers Association of North Carolina.
The two events are corporately unrelated. Philip Morris USA is a division of Altria Group, Inc. Philip Morris Intl., was spun off from Altria Group to become a standalone, independent company in 2008.
In Georgia, growers with single-year PM USA contracts that ended with the 2009 season were told that those contracts would not be renewed in 2010. The company will honor multi-year contracts that extend into 2010 or beyond.
Tobacco growers note they were surprised by the moves. Although the companies haven't officially addressed the closings, they have led to some grower speculation that new excise taxes, particularly relating to the funding of the State Children's Health Insurance Program, or the uncertainty of potential demands by Food and Drug Administration regulation, may be putting greater-than-expected stresses on tobacco companies.