GOING BY SOME of the news, you might think big tobacco was teetering. Under the weight of lawsuits, competition from low-cost competitors and counterfeiters, and the antitobacco ordinances cropping up around the nation, Fortune magazine recently wrote that at Philip Morris, the ''giant domestic tobacco business is now broken.'' Profits at Philip Morris USA, the nation's largest cigarette maker, fell last year by 13 percent, to $5 billion, and are predicted to fall by another 23 percent. R.J. Reynolds, the second-largest producer of cigarettes in the United States, this week cut its profit outlook for 2003. The company predicts a drop in tobacco consumption by 8 to 10 percent. RJR's chairman and CEO, Andrew Schindler, said, ''To strengthen our business and improve earnings in future years, we are fundamentally rethinking how we approach the marketplace and will be realigning our cost structure to match the realities of today's environment.''
Reynolds and Philip Morris might not have to think all that hard to strengthen their business, both in the United States and abroad. At home there is evidence that their biggest ally in the marketplace just might be state budget cuts.
According to a new survey by the Massachusetts Association of Health Boards, minors have found it much easier to buy cigarettes following the 2002 gutting of the state's tobacco control program from $49 million down to $6 million. In 68 localities that lost their funding and with it the ability to conduct compliance checks, the association found that 29 percent of stores now sell cigarettes to minors. Prior to the cuts, only 9 percent of stores were caught selling cigarettes to minors.
The 29 percent shows how fragile the antitobacco gains of the 1990s might prove to be. Seven years ago, 40 percent of stores sold cigarettes to minors nationally. With new laws and funding for compliance checks, the percentage dropped to 16 percent in 2001. Where Massachusetts once led the nation in driving youth smoking drastically downward, the shortsightedness of state politicians may lead children right back into the laps of Philip Morris and RJR.
The release of the survey comes at the same time that the Bush administration has launched another push to sabotage the World Health Organization's treaty on tobacco control. The treaty, worked out among 171 nations after the United States led an acrimonious attack on its strongest provisions over the winter, is set to come before the World Health Assembly later this month. The treaty would institute a ban on tobacco advertising except where the ban is unconstitutional. It would encourage nations to significantly raise taxes on a pack of cigarettes, since studies show that higher taxes discourage smoking. The treaty would also force cigarette makers to put larger warning labels on cigarette packs and create tobacco control programs.
Most of the world wants a treaty because smoking is already killing nearly 5 million people a year. At current rates of smoking and with big tobacco making huge pushes in developing countries and Eastern Europe, the number of deaths will rise to 10 million over the next two or three decades.
But the United States, where Philip Morris is the nation's fifth-largest contributor to political campaigns ($20 million since 1990, $15 million of it to Republicans), wants to gut the treaty by forcing WHO to accept a ''reservations'' clause. The clause would allow nations with ''reservations'' against one or more of the treaty's provisions to opt out of it.
The Bush administration in its Orwellian language says: ''The United States has fully engaged with the global community to produce a strong and dynamic'' treaty. Yet it objects to just about the entire treaty. The United States does not want larger labels. It does not want to strictly define what an advertisement is. It does not want prohibit the handing out of free samples.
The obvious reason the United States is playing the lone cowboy again, if you put two and $20 million together, is so Philip Morris and the Marlboro Man have the unrestrained right to seduce vulnerable populations around the world by recycling the glamourous advertisements that have been significantly restricted here at home.
Philip Morris, which has sought to disguise itself by changing its corporate name to Altria, is growing abroad. According to Fortune, Altria's international tobacco division is now the biggest revenue producer for the company, reaping $5.7 billion in profits last year. Profits are expected to grow 11 percent this year. It may be stormy for Philip Morris at home, but abroad, the chief of Philip Morris International, Andre Calantzopoulos, said, ''You don't have the sticker on you that says `bastard.' ''
If the results of the Massachusetts Association of Health Boards are an indication, the sticker is losing its glue at home, too.
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