Winter-Cookson accused two of its rivals of breaking a decades-old code of practice.

Winter-Cookson chairman Mr. Lou Petty's allegation was aimed at Pitt & Company and Tobacco Associates.

Both companies lost a lucrative tobacco contract with RJ Reynolds Tobacco International to WC earlier this year.

But instead of accepting it quietly, Mr. Petty claims "unnecessary'' problems have arisen from the transfer.

Primarily, both firms have refused to sell their old RJR stock to WC, as is local custom following an agency transfer, said Mr. Petty.

"This has always been the way when local agencies have been transferred in the past,'' he said. "In over 40 years in this business, I, nor any of my colleagues, have experienced the sort of problems we are having with this transfer.'' He also accused Pitt & Co. and Tobacco Associates of breaking their contracts with RJR once the two companies learned WC was to become the new agent.

"During the month of August, while still acting as RJ Reynolds' agent, both Pitt & Co and Tobacco Associates removed RJR's brands from their vending machines despite a contract with RJR to carry them,'' said Mr. Petty.

Mr. Ken Hockenhull, general manager of Pitt & Co., called Mr. Petty's remarks "spurious and irrelevant to any commercial issue and not worthy of lengthy reply''.

Mr. Petty's comments come only days after Hamilton retailer Mr. Keith Cabral, who runs the Book Rack, accused Pitt & Co of treating him unfairly.

Mr. Cabral was outraged when Pitt & Co put up his prices on other cigarette brands not long after he stopped taking their RJR products.

"The increases mean that I cannot sell their brands at competitive prices and still make a decent profit,'' he said.

He said there was a price war going on between Winter-Cookson and Pitt & Co and said he refused to take part in it.

One company would slash the price of a 20-packet carton of cigarettes by 50 cents and the other cut it another 50 cents, said Mr. Cabral.

But Mr. Petty said: "There is no price war as far as Winter-Cookson and Company is concerned.'' WC has not altered the base price to retailers of its RJR brands, which include top sellers like Winston, Camel and Salem, since it won the contract, he said.

However, WC has run special promotions to push all its cigarette brands, which had benefitted the customer, he added.

Since WC was awarded RJR's tobacco, Pitt & Co has continued to sell RJR's products by buying them from a third party, believed to be a company based in Philadelphia.

RJR was putting pressure on the US firm to stop the arrangement, The Royal Gazette has been told.

Mr. Petty expressed dismay at the controversy, particularly since RJR contributed to Bermuda's community through sponsorship of local sporting events like the Camel Cup and Cup Match.

He added: "This commitment to our community will continue through the good efforts of Winter-Cookson and Company and RJ Reynolds Tobacco International.'' "When we took on RJ Reynolds it was with the idea of a fresh new approach.

This will benefit all parties concerned, especially the consumer.'' A spokesman for Tobacco Associates did not want to comment on the row.