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May 16, 2012

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Philip Morris Says It's Closing Midway Tobacco-Receiving Station

Sun Photo by O.J. Early

This is the tobacco receiving station on Pottertown Road that has been operated for years by Philip Morris USA. The company plans to close the station, local and regional tobacco-growers learned Friday.

Originally published: 2012-01-14 01:05:32
Last modified: 2012-01-14 01:14:25
 


Growers Disappointed

And Angry; Some Say

They'll Sell Their Crop

To Other Companies

BY BOB HURLEY

COLUMNIST

Tobacco-growers from three states were openly frustrated and upset Friday after Philip Morris USA and its parent company, Altrea, announced the closing of the company's tobacco-receiving station on Pottertown Road at Midway.

The announcement came during a private meeting between growers and Altrea officials at noon Friday at the General Morgan Inn and Conference Center.

Growers from Tennessee, Virginia and North Carolina had been invited to the meeting after rumors of the impending closing became widespread.

"This is another perfect example of how corporate America steps on the little man," said John Litz, of Hamblen County, a veteran grower and a former member of the Tennessee House of Representatives.

"The decision to close this receiving station was based solely on them, and had absolutely nothing to do with the growers," Litz said.

Litz said he has already served notice on Philip Morris that he will never deal with the company again, and furthermore, that he will not fulfill his contract that was made for the 2011 crop.

"I'm gone," he said. "I'm through with Philip Morris forever."

Litz and some other growers have said they will pursue opportunities with a Japanese tobacco company (JTI) that operates a large receiving station in London, Ky., and with the Burley Stabilization Corporation (BSC), which operates a receiving station in the former Co-Op Tobacco Warehouse, on West Main Street in Greeneville.

Other growers, such as Mike Gray, of Horse Creek, say they will probably stick with Philip Morris, transporting their crops to a receiving station in Danville, Ky., but on a smaller scale.

"I'm looking at cutting 40 to 50 acres of tobacco," Gray said, "and going more with other crops, especially grains."

Unconfirmed reports said that Philip Morris would close the Pottertown Road station on Feb. 17.

Attempts to reach Philip Morris corporate headquarters officials in Richmond, Va., for comment on the closing were unsuccessful Friday afternoon and evening.

"This might be a blessing after all," said Gary Berry, a grower and greenhouse operator on Stone Dam Road.

"There are other opportunities out there, and some of the reports I'm hearing say that the demand for tobacco will be greater than the supply for the crop in 2012 and beyond," Berry said.

Berry, a student of tobacco marketing trends as well as production of the crop, says that Friday's announcement by Philip Morris continues to alienate most growers who had sold their crops at Midway.

"I don't think you will see many of the growers follow Philip Morris to its new receiving stations in Kentucky and Virginia," Berry said.

He cited numbers that reflected much better prices from the Japanese buyers in London, Ky.

Litz, who had contracts for the 2011 crop with both Philip Morris and the Japanese, says he has averaged far better prices in London, Ky., than he has at Midway.

"I've been jerked around by Philip Morris for the last time," Litz said following Friday's meeting.

"I'm predicting that Philip Morris will get between three and five farmers in this area (from Knoxville to Mountain City and in adjoining states) to grow tobacco for them next year," he added.

Most Greene County growers pulled away from Philip Morris several years ago amid a slew of new and tougher regulations that added increased costs to a profit margin that most growers call "slim at best."

Bill Rogers is a 77-year-old grower from Jefferson County who drove to the Greeneville meeting because he thought there was a glimmer of hope that he could continue selling his tobacco at Midway for at least three more years.

"I've always said I wanted to grow tobacco until I was 80," he said after Friday's meeting, "and I plan to continue to work toward that goal.

"I've sold with Philip Morris for so long now that I'll probably stick with them and haul my tobacco to Danville, Ky.

"But, in so many words, the Philip Morris people told us in Greeneville on Friday that we are just a number and that they don't care about us."

Rogers said he had been growing tobacco since he was a teenager and that the changes he has witnessed in the tobacco industry in the past 20 years are stranger than fiction.

"My goodness, who would have thought it?" he said. "But if I can hold on for three more years, I'll turn it over to someone else and quit worrying about it."

 

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