New York, Oct. 28 (Bloomberg) -- Philip Morris Cos. sued a New York grocery claiming it sells fake Marlboro cigarettes as the world's largest tobacco company continues its legal campaign against counterfeit sales.

The suit accuses the Around the Clock Grocery in Staten Island, New York, and unnamed others who are selling cigarettes in boxes that are similar to those of Marlboro, the most popular cigarette brand for Philip Morris USA, the U.S. tobacco unit of the company that also owns Kraft Foods Inc. Philip Morris USA blames counterfeiters and the black market for hurting its sales. Rising prices also have crimped sales, with a pack of cigarettes in New York City costing as much as $7.50. The higher cost stems from higher ``sin taxes'' in certain states and cities and price increases to pay for the industry's $206 billion settlement with 46 states in 1998. The Staten Island grocery is selling cigarettes in packages that are ``either identical with or substantially indistinguishable from the Marlboro'' trademarks, the lawsuit says. Philip Morris USA hired an investigator to buy cigarettes at the store in August and tested what they bought. ``The counterfeit Marlboro brand cigarettes are not the same or of the same quality as those manufactured and sold by Philip Morris USA under the same brand name,'' the suit contends. The tobacco giant, alleging violations of its federal trademarks, seeks damages and a court order blocking sales of counterfeit cigarettes. Attempts to contact the grocery store were unsuccessful. Shares of Philip Morris fell 96 cents $41.64 at 4:17 New York time in New York Stock Exchange composite trading. Latest Suit The lawsuit, filed Oct. 17 in Brooklyn, New York, is the latest lawsuit the New York-based company has brought against the underground cigarette market. Last month, Philip Morris sued more than a dozen Web sites it said were illegally selling cigarettes. Many of those sales were of cigarettes made for overseas markets that weren't subject to the high U.S. taxes. Earlier this month, Philip Morris said the company's U.S. tobacco business fell 2.4 percent to $5.02 billion in the third quarter in part because of lower volume. In the first nine months of the year, U.S. tobacco sales accounted for $14.9 billion, or almost a quarter, of the company's $61.6 billion in sales. Global tobacco sales account for almost 60 percent of the company's annual sales.

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