US company Philip Morris is to stop making cigarettes in Australia by the end of the year.
It is closing its plant in Victoria state – after 60 years – with the loss of about 180 jobs
Philip Morris blamed Australian government regulations which it says restrict its exports to Asia.
It will shift production to South Korea, where it will not have to abide by so-called “reduced-fire risk” laws introduced in Australia in 2010.
Those laws mandate the use of particular paper and manufacturing methods to ensure that a cigarette self-extinguishes when dropped on the ground.
The company had invested heavily in the Australian factory from 2006 to 2009 to capitalise on increased demand in Asia.
But it said the reduced-fire risk requirements led to taste changes that did not match Asian consumer preferences.
Philip Morris insisted the factory closure was not related to the plain packaging laws iIntroduced in Australia in December 2012.
Those laws enforced standardised packaging on all tobacco products. Companies had to replace logos and branding with graphic images of smoking-related diseases on a drab background.