Italy's Tobacco Monopoly to be Sold (fwd)

[Robert Weissman <rob@essential.org>]

                                Italy's tobacco monopoly to
                                be traded to investors 

                                Plan calls for creation of joint-stock company 

                                By Rafaella Malaguti 

                                BLOOMBERG NEWS 

                                ROME 

                                The Italian government has issued a decree
to convert its tobacco
                                monopoly into a joint-stock company, which
will then be sold to
                                private investors. 

                                The government said in the decree last week
that the monopoly
                                will be first turned into a unit with
separate accounting from the
                                states or ''ente pubblico economico.'' The
unit, called Ente
                                Tabacchi Italiani, must be then turned into
''one or more''
                                joint-stock companies ''not before 12 months
and no later than 24
                                months after the setting up of the board of
directors.'' 

                                Counting the permitted delays, the whole
process should take
                                about two and a half years. 

                                The decree noted that ''part of the shares''
must be reserved for
                                small investors once the government sells
part of its stake. The
                                government provided no specific timetable
for the sale. 

                                Italy's tobacco monopoly came under the
spotlight two months
                                ago, when the European Commission fined it 6
million European
                                currency units ($6.6 million) after
complaints from foreign rivals
                                that the government monopoly illegally
limits the number of
                                cigarettes some competitors can sell and
favors its own brands
                                through a quota system. 

                                Though the newly created Ente Tabacchi
Italiani will continue to
                                sell tobacco and salt, just like its
predecessor, the Amministrazione
                                Autonoma Monopoli di Stato, it will stop
operating lotteries. The
                                Ente's board of directors will be nominated
by Italy's Finance and
                                Treasury ministries. 

                                Such monopoly brands as MS and Nazionale
have about 42
                                percent of the Italian market, while Philip
Morris Cos., the world's
                                largest cigarette manufacturer and maker of
best-selling Marlboro
                                cigarettes, has about 51 percent of the market. 

                                Last year the Amministrazione Autonoma
Monopoli dello Stato
                                had tobacco sales net of tax totaling 3.4
trillion lire.

                                Published: August 24, 1998