COLUMBIA
Philip Morris International (PMI) is closing its factories in Columbia, leading some to believe the country’s iconic Pielroja cigarette will be taken off the market.
The factory closures will affect at least 800 factory workers in Medellin and Barranquilla and approximately 100 tobacco growers who have provided the leaves for the cigarette. PMI subsidiary, Coltabaco, said the company bought up more than half of the tobacco produced in the country.
PMI cited illicit tobacco trade in Columbia as the reason for the closures. “The illicit cigarette trade soared as a result of the sharp increase in sales taxes in 2016 and reached record highs in 2018 at 25% of the market,” said Philip Morris Colombia’s vice-president, Carlos Guzman.
The tobacco workers’ labor union, however, disagrees. A union spokesperson said, “The reason for the closure is an international policy of decentralization of production. It’s true that contraband has gone up and it’s true that taxes have gone up, but the tax rate here in Colombia is still the second-lowest in Latin America.”