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Philip Morris USA Points to a Significantly Changed Industry and a Future Shaped by the Present, Not the Distant Past, As Trial Begins in Federal Court
NEW YORK (September 22, 2004) - Philip Morris USA said the public saw substantial proof of how the tobacco industry has changed when it presented its evidence in the federal tobacco trial, which began Tuesday in Washington, D.C.
"The government will focus on the past, with little or no mention of the significant changes that have been imposed on the industry and reflected in the tobacco settlement agreement reached with the states in 1998," said Michael Pfeil, vice president of corporate communications for Altria Group, the parent company of Philip Morris USA. "The future of the industry will be shaped by the blueprint of comprehensive change that exists today."
"You simply can't ignore the breadth and depth of the changes the tobacco industry has made in its business practices, and nothing the government can say in court will alter that fact."
Also addressed were Philip Morris USA's widespread acknowledgements that there is no safe cigarette; that smoking is addictive and causes serious diseases; and the company's efforts to inform people about the health risks of smoking through its Web site, print and television advertisements. "The government clearly has an important role to play in protecting public health, and we support that role fully," Pfeil added.
To receive any remedy, the government must convince the court that the industry is likely to engage in wrongful conduct in the future a standard the company argues cannot be met under the current regulatory and public environment in which cigarettes are marketed and sold today.
"The court is required to review the totality of circumstances," said William Ohlemeyer, vice president and associate general counsel for Altria. "It's difficult for the government to argue that the distant past is a reasonable predictor of the future. It overlooks the most recent decade, the present and a detailed list of how differently cigarettes are sold today versus the distant past."
The company points to the public record of change and reform, and says it can't engage in the kind of past behavior the government is complaining about in the future.
The company asserts that the 1998 Master Settlement Agreement (MSA) with the states set forth sweeping prohibitions on how tobacco can be marketed and sold in this country and that strict compliance with these prohibitions is closely monitored by the Attorneys General in all 50 states.
Pfeil noted prominent restrictions under the MSA that have greatly reduced the profile of tobacco marketing in the United States, including a prohibition on marketing to youth, the elimination of tobacco billboard advertising, the ban of cartoon characters, branded merchandise and product placement in movies and television.
Stressing the leadership Philip Morris USA has shown in implementing change, Peggy Roberts, senior director of communications, highlighted business practices, in addition to the requirements of the MSA, the company has adopted in direct response to societal expectations.
"As a company, Philip Morris USA has gone beyond the provisions mandated by the MSA in a number of ways including reducing our magazine advertising by 94 percent and eliminating any brand advertisements on the back covers of any magazine."
In its lawsuit, the government is demanding a $280 billion payment from the five major tobacco companies, in effect saying that the purchase of virtually every pack of cigarettes in the United States over the past three decades was because people were fooled about the health effects of smoking. Philip Morris USA will argue that the government and public were well informed about the risks of tobacco, from the mandated health warnings on the packages to annual reports published by the Surgeon General to frequent government involvement in many aspects of the tobacco industry.
"Suggesting the return of every penny that anyone ever spent buying cigarettes is certainly not consistent with the law, and not something the government can prove as a matter of fact," Ohlemeyer said.
