Philip Morris to close Australian plant
Philip Morris will sack 180 workers as it ceases manufacturing in Australia, with the tobacco giant partly blaming the closure on government regulation.
Philip Morris Limited (PML) will close its manufacturing plant in Victoria by the year's end, with production to be sent offshore to Korea.
The company said its Moorabbin plant was operating at half capacity as plans to grow export markets for Australian-made cigarettes had not materialised and domestic demand was in a long-term gradual decline.
John Gledhill, PML managing director for Australia, New Zealand and the Pacific Islands, said the introduction in 2010 of reduced-fire risk requirements for Australian-made cigarettes had resulted in products that do not match consumers' preferences in other markets in the region.
"Despite the introduction of plain packaging and the continued growth in illicit trade, PML's volumes were stable in 2013," Mr Gledhill said in a statement on Wednesday.
"However, with any significant export opportunity restricted by Australian government regulations, our Moorabbin factory is significantly under-utilised, operating at less than half of its currently installed capacity.
"Regrettably factors beyond our control prevent us from fully utilising the facility, and accordingly it's been identified for closure."
He said 180 staff directly involved in manufacturing would be affected by the shutdown, but Philip Morris would maintain a "strong, ongoing commercial presence in Australia" with about 550 people at its Melbourne headquarters.
Support for affected workers would include redeployment opportunities where feasible and career transition or retirement advice.
"This is an extremely difficult decision, and devastating news for all of our employees," Mr Gledhill said.
"Philip Morris Limited has a proud history of nearly 60 years of manufacturing in Moorabbin, being the first Philip Morris affiliate established outside of the United States, and many of our employees have been with the company for a significant part of that journey."
The Australian Workers Union said it was in negotiations with the company over the shutdown, which was a further blow to Australian manufacturing.
"We should be planning ahead with a blueprint for jobs that addresses the catastrophic consequences for our community of manufacturing progressively shedding people in this state," AWU Victorian secretary Ben Davis said.
"These are people who have done an honest job, been loyal to their employer and contributed to the life of this state. They need jobs."
Australian Council on Smoking and Health president Mike Daube welcomed the decision to close down the cigarette manufacturing plant.
“It’s a recognition by the tobacco industry that smoking in Australia is on the way out, and it’s clear that the comprehensive approach, including ad bans, tax increases, media campaigns, non-smoking measures and plain packaging, is having an impact,” Professor Daube said.
“There are three major companies in the Australian market - Philip Morris, British American Tobacco and Imperial – so it’s one down, two to go.”
Heart Foundation chief executive Maurice Swanson urged the Federal Government to continue to increase tax on cigarettes to drive up the price, and for State Governments to reduce the number of retail outlets that sell tobacco throughout Australia.
