LONDON, Aug 24 (Reuters) - Philip Morris International and Altria said on Monday they had entered contract manufacturing arrangements with one another, as Altria looks to grow cigarette imports and exports and take advantage of a tax rebate.
The rebate, known as the "double duty drawback", allows U.S. tobacco companies exporting their products outside the U.S. to claw back federal excise taxes paid on domestically sold products, offering a significant boost to U.S. profits.
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Altria, which makes Marlboro cigarettes in the United States but does not sell tobacco elsewhere, is boosting partnerships with foreign manufacturers in order to grow its imports and exports.
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Philip Morris International, which makes Marlboro for the rest of the world and does not sell cigarettes in the United States, said the contract manufacturing deal with Altria does not change this and it has no plans to sell cigarettes in the U.S.
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Altria said that the arrangement will enhance efficiency and generate "economic benefits".
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The first shipments are expected in 2027, PMI said. Both companies said they did not expect the arrangements to affect 2026 performance.
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Altria's shares rose over 2% in early trade. PMI stock was 1.5% higher.
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Altria said in January it expected a profit boost in the second half of 2026 thanks to similar partnerships with other manufacturers.
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Altria is the former parent company of PMI, formerly its international unit that was spun off in 2008.
Reporting by Emma Rumney; Editing by Chizu Nomiyama and Tomasz Janowski
Source: Reuters