Philip Morris takes hands-on role in Singapore marketing

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COPENHAGEN -- Philip Morris has terminated its marketing and distribution agreement for Singapore with Denmark's OK Group and taken the business in-house. The decision represents a business loss of $367 million a year for OK Group, which has handled the distribution account since the mid- 1960s.

However, OK Group will continue to provide logistics services to Philip Morris in Singapore, including storage facilities. The firm will also continue to market and distribute Marlboro in Malaysia, Indo China, and the Philippines.

The existing contract between Philip Morris and OK Group was due to expire in the year 2000 and the U.S. tobacco company is reported to have paid in excess of $20 million as compensation for the premature ending of the contract.

"Singapore is a very restrictive market where advertising is banned and marketing is difficult," says Carsten Dencker Nielsen, regional director, marketing, with OK Group. "Philip Morris wants a more hands on approach to promoting its own brands in Singapore."

Copyright November 1997, Crain Communications Inc.

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