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Tobacco Firms Breathe Easily

Published on Saturday, March 3, 2007 by the Boston Globe
Tobacco Firms Breathe Easily
by Derrick Z. Jackson
 

THE DEVIL is in heaven. Philip Morris is so profitable, it can afford to say it wants government regulation. Why, it is hopping in bed with Edward Kennedy, the anti-tobacco liberal senator from Massachusetts.

The cackle from Hades could not be louder if it came from Vincent Price. What a coincidence. Price, the creepy B-movie horror actor, was one of many Hollywood luminaries to die of lung cancer.

Kennedy, chairman of the Senate's committee on health, is using the new Democratic majority in Congress to sponsor a bill that would give the Food and Drug Administration authority to control the cigarette industry, from its chemicals to advertising. Several Republicans are among the 30 co sponsors, including Susan Collins and Olympia Snowe of Maine.

This week, anti smoking advocates came before Kennedy's committee to support the bill. Among those who testified were Greg Connolly, the former director of the Massachusetts Tobacco Control Program. Now a researcher at the Harvard School of Public Health, Connolly coauthored a recent study that found that cigarette companies have increased their levels of addictive nicotine, even after the $200 billion Master Settlement Agreement between big tobacco and 46 states, the largest civil settlement in US history.

Connolly also testified that since the settlement, R.J. Reynolds, Brown & Williamson, and Lorillard have maintained advertising strategies that result in greater exposure to ads by youth than adults. The trend is most notable for menthol cigarettes, which have long been targeted at African-Americans.

One astounding result, according to Connolly, is that the percentage of African-Americans ages 18 to 25 who smoke menthol cigarettes has shot up from 19.8 percent in 2002 to 25.8 in 2005. Philip Morris, whose parent company is Altria, brags that it stopped advertising in general-circulation magazines. However, it is coming in the back door, launching a new Marlboro menthol cigarette that it says reinforces the brand's "flavor heritage" and offers "adult smokers a uniquely rich and smooth taste."

Adult smokers? Sure. Like R.J. Reynolds's new Camel No. 9, in hot-pink-trimmed boxes and advertised as "light and luscious," and Brown & Williamson's candy-flavored Kools are marketed to Ruth Bader Ginsberg.

"The industry is clearly going after the at-risk population," Connolly said. "Has the industry changed after the MSA [Master Settlement Agreement]? Yeah, and not for the better."

The rub is that Philip Morris says bring the FDA on. In a press release two weeks ago when Kennedy filed his bill, CEO Michael Szymanczyk of Philip Morris USA said, "This legislation will deliver its greatest benefits to tobacco consumers by providing a new framework within which manufacturers can focus on reducing the harm of their products."

The crocodile cheer is easy to understand. Philip Morris, knowing that it has a product that is not going to be banned outright, is using this to choke off the domestic competition. Other cigarette companies oppose the legislation, saying it would hurt their ability to compete. Philip Morris is so big, with its expanding exploitation of the rest of the world, that Altria is America's 10th most profitable company, according to Forbes, clearing $10.4 billion in 2005. Whatever the government slaps down on the industry, it will be the company best able to adjust. In a 1999 Forbes interview, Szymanczyk was not worried about the fallout from the tobacco settlement, saying, "We feel pretty good once we get past this transition period." By the end of 2005, Fortune magazine declared Altria to be one the "10 Sturdy Stocks" for 2006.

At the end of 2006, Fortune's Investor Guide said Altria was one of its "Heavyweight Champs" for 2007. The guide cited that Marlboro controls 41 percent of the US cigarette market and the company "now accounts for 60 percent of sales in Mexico, nearly 40 percent in Western Europe, and 25 percent in Japan." Big tobacco's confidence that US courts will go only so far in allowing damages to be paid to smokers was buoyed recently when the Supreme Court vacated $79.5 million in punitive damages to an Oregon smoker.

Fortune's investor guide said, "We've been recommending Altria Group for the past several years . . . love it or hate it."

Now the dance with the devil begins. Kennedy will try to do something, anything, to limit the potency and false advertising about cigarettes. Altria's profits will still be heavenly. The only appropriate sound is the haunting laugh of Vincent Price.

Derrick Z. Jackson's e-mail address is jackson@globe.com.

Copyright 2007 Boston Globe 

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