The Netherlands: "After making millions of profit" Tobacco Firm Philip Morris to End Production in Netherlands - by Maarten van Tartwijk

U.S. cigarette maker Philip Morris International Inc. said Friday it will shut down its manufacturing facility in the Netherlands as the tobacco giant wrestles with dwindling demand for traditional smoking products in Europe.

Philip Morris said the closure of the plant in Bergen op Zoom, its largest production facility world-wide, would result in 1,230 job losses, about 90% of its total workforce there. Production will shift to other factories in Europe with spare capacity, it said.The plans still require approval from Philip Morris Holland's supervisory board and will be discussed with labor unions.

Tobacco makers in Europe are struggling with falling demand for cigarettes, due to an increase in health awareness, a weak economy and higher taxes on smoking products. 

Philip Morris said sales volumes have plummeted 20% in the past four years and that a recovery is "highly unlikely."

The company also blamed a new European Uniontobacco-control law that will ban flavored cigarettes and require bigger warning labels on packets. The tougher regulatory environment is creating a fertile ground for "criminal organizations involved in the illegal cigarette trade," it said.

The announcement comes days after Philip Morris said it would stop making cigarettes in Australia by year-end, halting nearly 60 years of manufacturing in Melbourne. The closure could result in the loss of as many as 180 jobs as the company shifts production to South Korea.

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