The lawsuit, filed in U.S. District Court for the Middle District of North Carolina, alleges Philip Morris' retail lenders programme prevents competitors from gaining any meaningful presence in the retail market and restricts price competition.

Retailers who participate in the programme must devote a certain amount of display space and advertising to Philip Morris brands, which include Marlboro, Merit and Virginia Slims.

Retailers not signing the exclusionary contracts would not be eligible for significant promotion and display payments.

R.J. Reynolds, a division of RJR Nabisco (RN) said it is seeking unspecified damages and a court order barring Philip Morris from using its industry position to allegedly achieve exclusionary levels of merchandising display space, advertising and pricing restrictions.

The antitrust lawsuit follows a similarsuit filed last year by PepsiCo Inc., the second-largest soft drink company, against its larger rival Coca-Cola Co. PepsiCo alleged Coca-Cola held a monopoly over the fountain soft drink market by forbidding independent food service distributors from carrying Pepsi products.

Maura Payne, spokesperson for RJR, said the Retail Leaders Program constitutes unfair competition and restraint of trade because it prevents competitors from acquiring visual shelf space in stores.Philip Morris (MO) was not immediately available for comment.