[R-G] [BillTottenWeblog] The New Philip Morris

[Bill Totten]

Even Worse than the Old?

New Plans to Spread Death and Disease

by Robert Weissman

CounterPunch (April 01 2008)
	

Philip Morris International today starts business as an independent
company, no longer affiliated with Philip Morris USA or the parent
company, Altria. Philip Morris USA will sell Marlboro and other
cigarettes in the United States. Philip Morris International will
trample over the rest of the world.

Public health advocates have worried and speculated over the past year
about what this move may mean, but Philip Morris International has now
removed all doubts.

The world is about to meet a Philip Morris International that will be
even more predatory in pushing its toxic products worldwide.

The new Philip Morris International will be unconstrained by public
opinion in the United States - the home country and largest market of
the old, unified Philip Morris - and will no longer fear lawsuits in the
United States.

As a result, Thomas Russo of the investment fund Gardner Russo & Gardner
tells Bloomberg, the company "won't have to worry about getting
pre-approval from the US for things that are perfectly acceptable in
foreign markets". Russo's firm owns 5.7 million shares of Altria and now
Philip Morris International.

A commentator for The Motley Fool investment advice service writes, "the
Marlboro Man is finally free to roam the globe unfettered by the legal
and marketing shackles of the US domestic market".

In February, the World Health Organization issued a new report on the
global tobacco epidemic. WHO estimates the Big Tobacco-fueled epidemic
now kills more than five million people every year.

Five million people.

By 2030, WHO estimates eight million will die a year from
tobacco-related disease, eighty percent in the developing world.

The WHO report emphasizes that known and proven public health policies
can dramatically reduce smoking rates. These policies include indoor
smoke-free policies; bans on tobacco advertising, promotion and
sponsorship; heightened taxes; effective warnings; and cessation
programs. These "strategies are within the reach of every country, rich
or poor and, when combined as a package, offer us the best chance of
reversing this growing epidemic", says WHO Director-General Margaret Chan.

Most countries have failed to adopt these policies, thanks in no small
part to decades-long efforts by Philip Morris and the rest of Big
Tobacco to deploy political power to block public health initiatives.
Thanks to the momentum surrounding a global tobacco treaty, known as the
Framework Convention on Tobacco Control, adopted in 2005, this is
starting to change. There's a long way to go, but countries are
increasingly adopting sound public health measures to combat Big Tobacco.

Now Philip Morris International has signaled its initial plans to
subvert these policies.

The company has announced plans to inflict on the world an array of new
products, packages and marketing efforts. These are designed to
undermine smoke-free workplace rules, defeat tobacco taxes, segment
markets with specially flavored products, offer flavored cigarettes sure
to appeal to youth, and overcome marketing restrictions.

The Chief Operating Officer of Philip Morris International, Andre
Calantzopoulos, detailed in a March investor presentation two new
products, Marlboro Wides, "a shorter cigarette with a wider diameter",
and Marlboro Intense, "a rich, flavorful, shorter cigarette".

Sounds innocent enough, as far as these things go.

That's only to the innocent mind.

The Wall Street Journal reported on Philip Morris International's
underlying objective: "The idea behind Intense is to appeal to customers
who, due to indoor smoking bans, want to dash outside for a quick
nicotine hit but don't always finish a full-size cigarette".

Workplace and indoor smoke-free rules protect people from second-hand
smoke, but also make it harder for smokers to smoke. The inconvenience
(and stigma of needing to leave the office or restaurant to smoke) helps
smokers smoke less and, often, quit. Subverting smoke-free bans will
damage an important tool to reduce smoking.

Philip Morris International says it can adapt to high taxes. If applied
per pack (or per cigarette), rather than as a percentage of price, high
taxes more severely impact low-priced brands (and can help shift smokers
to premium brands like Marlboro). But taxes based on price hurt Philip
Morris International.

Philip Morris International's response? "Other Tobacco Products", which
Calantzopoulos describes as "tax-driven substitutes for low-price
cigarettes". These include, says Calantzopoulos, "the 'tobacco block',
which I would describe as the perfect make-your-own cigarette device".
In Germany, roll-your-own cigarettes are taxed far less than
manufactured cigarettes, and Philip Morris International's "tobacco
block" is rapidly gaining market share.

One of the great industry deceptions over the last several decades is
selling cigarettes called "lights" (as in Marlboro Lights), "low" or
"mild" - all designed to deceive smokers into thinking they are safer.

The Framework Convention on Tobacco Control says these inherently
misleading terms should be barred. Like other companies in this regard,
Philip Morris has been moving to replace the names with color coding -
aiming to convey the same ideas, without the now-controversial terms.

Calantzopoulos says Philip Morris International will work to more
clearly differentiate Marlboro Gold (lights) from Marlboro Red
(traditional) to "increase their appeal to consumer groups and segments
that Marlboro has not traditionally addressed".

Another, related initiative is Marlboro Filter Plus, which claims to
reduce tar levels. First launched in Korea, in 2006, Calantzopoulos says
it has recorded "an impressive 22 percent share" among what the company
designates as "Young Adult Smokers".

Philip Morris International also is unrolling a range of new Marlboro
products with obvious attraction for youth. These include Marlboro Ice
Mint, Marlboro Crisp Mint and Marlboro Fresh Mint, introduced into Japan
and Hong Kong last year. It is exporting clove products from Indonesia.

Responding to increasing advertising restrictions and large, pictorial
warnings required on packs, Marlboro is focusing increased attention on
packaging. Fancy slide packs make the package more of a marketing device
than ever before, and may be able to obscure warning labels.

Most worrisome of all may be the company's forays into China, the
biggest cigarette market in the world, which has largely been closed to
foreign multinationals. Philip Morris International has hooked up with
the China National Tobacco Company, which controls sales in China.
Philip Morris International will sell Chinese brands in Europe. Much
more importantly, licensed versions of Marlboro are expected to be
available in China starting this summer. The Chinese aren't letting
Philip Morris International in quickly - Calantzopoulos says "we do not
foresee a material impact on our volume and profitability in the near
future". But, he adds, "we believe this long-term strategic cooperation
will prove to be mutually beneficial and form the foundation for strong
long-term growth".

What does long-term growth mean? In part, it means gaining market share
among China's 350 million smokers. But it also means expanding the
market, by selling to girls and women. About sixty percent of men in
China smoke; only two or three percent of women do so.

The global vilification of Big Tobacco over the last decade and a half
is one of the world's great public health stories. Directly connected to
that vilification has been a reduction in smoking, and adoption of
life-saving policies that will avert millions of deaths.

Yet here comes Philip Morris International, now the world's largest
nongovernmental tobacco company. It is permitted to break off from
Altria with no regulatory restraint. It proceeds to announce plans to
subvert the public health policies that offer the best hope for reducing
the toll of tobacco-related death and disease. The markets applaud,
governments are mute.

What an extraordinary commentary on the political and ideological
potency of the multinational corporation - and the idea that
corporations should presumptively be free to do what they want, with
only the most minimal of restraints.
_____

Robert Weissman is editor of the Washington, DC-based Multinational
Monitor and director of Essential Action.

http://www.counterpunch.com/weissman04012008.html

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