We’ve been hearing the message from Philip Morris that they intended to become a full ”tobacco” company over the past year. The agreement that has been entered into will give Philip Morris the opportunity along with their recent entry into the smokeless category to do just that. What impact will this have on retailers? What impact will this have on other manufacturers? What affect do you think this will have on the space at retail? Share your thoughts on this very interesting acquisition!
Philip Morris to Purchase John Middleton
November 10th, 2007 | Acquisitions | Lou Maiellano
38 comments ↓
All I can think is that now retailers will be presented with contracts from rai & pm that will fight over the “tobacco space”. I’m not looking forward to this. I wonder whether PM will declare that the header is not included in the counted space on horizontal sets. I have to think that the USST, Altadis, Swedish & Swisher folks are going to be challenged. UGH thoughts of this give me a headache.
One aspect of this acquisition that intrigues me from a political-economy perspective is the “little cigar” issue given that Black & Mild has become the principal target in NAAG’s attack on the little cigar sector, something the participating manufacturers, of which PM is one, have been eager to go after given their general view that cigarette sales are being lost to some little cigars. With this acquisition PM is now squarely on both sides of this issue. Since Black & Mild’s use of burley tobacco and flavorings is what gives it its distinctive sweeter taste, accounting for much of the $2.2 billion in value in the acquisition, PM will now need to fight the redefinition of little cigars by use of the new carbohydrate test developed by TTB which I guess we will see when the next round of comments come out on changing the testing standard expected early next year.
I think that PM since they are the author of FDA regulation will just write it as they would like to see it written and then send a lifetime supply of black & mild wine (whine) to the fool in Massachusetts.
I’m hearing that Middleton already laid of an individual in upper management. Any one know if this is true? Are more to come?
Listen up Monte - you might be next pal!n time to quit golfing and start working on something other than your handicap!
monte cristo - I believe the rumors are more than rumors, but it has nothing to do with the sale…..
It is due to new imported management ideas that appear to have power struggle written all over it. The individual that is gone has a rapport in the industry that the new leader will NEVER achieve.
stir it up — it will be an interesting process — be interesting to see who PM puts in charge of the JM business — these two organizations operate at the opposite extremes — makes me wonder what pete paoli is doing these days at PM — hmm
Pete’s at home cooking pasta and the powers at PM are licking their chops and thinking “look what these dummies at JMI have done to date and just imagine where it can go with our brilliance!” Arrogance combined with intelligence and billions in free cash flow is a scarry thing!
I hear young John Middleton is sharing his take with every single JMI employee at some dollar level. Wonder if JG will receive anything after 22 good years??
Anybody figure out what Herzog is talking about when she says the B&M brand will help PM crack the menthol dilemna? Never saw a menthol product in the B&M line.
Yeah it’s a shame to see JG leave. What a guy! Someone will snag him soon. I can only envision a lot of people leaving due to PM ownership.
fredmertz I understand that in fact there was some sharing of the new wealth from the family. If JG was not included, shame on them. It is a shame that the CEO was killed in an automobile wreck. Was retiring after all these years…. What a real disaster…… Rumor is that many of the old guard are bailing out while they can. Not sure I blame them…..
I can only imagine the cultural shock the folks from JM who stay will experience. Probably shorten their lifes by a few years unless they move on! Wouldn’t wanna be in some of my friends shoes at JM that stay!
Feel bad for the folks at John Middleton. Wish them all the luck in the world.
Well the JM sales staff won’t be around long in that environment. PM has already announced that their sales staff will be handling the JMI products and that the current JM sales staff will “consult” as “cigar experts”. I’d say the handwriting is on the wall for the JM boys!
I read the same thing that PM was going to integrate the back wall with other tobacco products. PM reps have been instructed that they will peddling the Black & Mild products. I think most locations have the product but now it will get positioned in the PM section of the cig set from what I hear.
Is it true that PM let all the Middleton sales folks go?
PM used the trade magazines and electronic venues to push out the word that the Middleton folks are being treated fairly and will have an opportunity to work as a rep for PM. Isn’t that what the former Middleton Director of Sales thought too?????????
Like that was ever going to happen otp kid!
The mix of the two cultures would never mix. Unfortunate but at least JG knew the deal and got out when he did. Good move JG!
Any one know what John Geise is doing these days? Probably sitting back and grinning knowing he read the cards right! Would be nice to know as he was always a great guy to work with.
Thanks for the compliment! I am doing great!
Call 610-420-4742, and I would be more than
happy to talk with you, and any of my great friends
in the industry.
John,
Great to see your doing well!
I will give you a call.
I agree with JJ above it was always great working with you.
TAZ
TAZ, I am looking forward to hearing from you!
SAL,
Great - I will give you a call!
JJ
Now the VP of Sales and Marketing is out too! Shocking huh?
Are you saying Rich Fasanelli was let go?
You Betcha!!! He’s outa there!!!
Hey all not only is JG and RF gone so will anyone who is connected with servicing the JM customers along with one in accounting, one in IT and they tried to include a gal who had been moved to the office shortly before the hammer came down. Someone in upper management knew what was going to happen so a move was made to save someone. Isn’t that using insider information. What would Altria do.
Yep he’s gone. I had heard he was told he was going to be their guy and he helped them with the transition under that assumption. How naive can somebody be???
Yeah it’s a shame I worked with Rich and he is a great guy but he must have been sold a bill of goods. And yes I mean naive might be an understatement. PM can not be trusted! Others saw it coming!
Dear Short-Term Employees,
We sincerely appreciate the tremendous amount of effort and energy each and every one of you put in to combining the efforts of our 2 great companies. The growth of your cigar and pipe tobacco business over the last decade is admirable and something that makes each very proud. A stellar performance on this scale is rare in our industry.
As we move forward transitionally toward the integration of our two companies, we see a bright future for our products, our customers and our stakeholders. Unfortunately, the future for each of you as an employee is dim. We regret to inform you that your services are no longer needed; in fact, they really never were. While we appreciate the annual double-digit growth you’ve achieved over the last decade, we remain clear and certain that your growth pales in comparison to what we could have achieved had we had your products in our portfolio.
We wish you much success in your future ventures and we are sure you will be happy if you achieve half of the success personally as we will be having now that you are out of the way.
Should you have any questions, please contact 1-800-ILUVFDA.
Thank you,
Seymour Butts
PM keeps rolling with Middleton. They have told the majority of the Home Office personnel in Limerick (Middleton’s headquarters) that they will all be released in February. I have been told that sales of Middleton products are way down with the major distributors reflected decreases of over 40% (only word of mouth). I have heard that some of the supervisors in the PM sales force (who now carry Middleton goods) state that “PM just didn’t know what they were getting into”. How can PM be surprised in the figures when they fire the sales force who built the company and the increases?
Haven’t heard that the majority of JMHQ office personnel will be gone. If sales are down that much, perhaps it is the loss of the motivated sales force and their belief in the product they were selling along with the personal attention the JM customers were probably being given, all of which put the company in the spotlight to be taken over. Darn shame.
Hey Bluesinger,
I heard the same as you that folks are seeing volume declines in JM products and that retailers & wholesalers miss all the JM folks. It’s really ashame to see the folks get screwed. It’s also ashame that the PM folks that now have to sell are missing the one key item that made JM fun and that was the relationships developed with the JM folks. Trying to deal with PM is like getting your teeth pulled. Very little enjoyment.
If –the numbers are down, does anyone really believe that they will increase when PM begins to enforce their rules/regs for being a direct buying customer?
Any thoughts on what the future will be then for Middleton other than no more Middleton and no more #1?
Some will find the following of interest as Black Max is a competitve product to JM’s Black & Mild.
Altadis USA launched a new little cigar brand called Black Max Menthol, available in packs of 20 little cigars. (CSPNet.com 08/13)
JM probably already knows but what will actually be done about it is anyone’s guess.
Without anyone really watching and all the promotions out there, it would not be surprising if another brand slips through to become #1.
Isn’t menthol the leading flavor ?
yes all the employees got a share of jm take from the sale but its going around that we didnt get the share jm wanted us to get people at the top took what they wanted first is this true??? anyone???
i would love to know too. maybe someday will know the truth the way i feel is, WHAT COMES AROUND GOES AROUND. hope they saves enough to keep there lifestyles the same when there unemployed.
It’s a shame that so many get caught up in what they are doing each day and don’t take the time to look at the world they live in. I have many friends that work for UST and I told them to get ready for the possibility of a PM purchase and not one of them took it to heart. I feel bad for these folks as they will soon be joining the ranks of displaced tobacco sales reps! One of the reasons I took a package from the old WS group.
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