A “Transformed” Tobacco Company? Reynolds’ Actions Show Otherwise

Statement of Matthew L. Myers President, Campaign for Tobacco-Free Kids

Feb. 25 2013

WASHINGTON, DC – Reynolds American Inc. has launched a campaign, including a new web site by its R.J. Reynolds subsidiary, claiming it is a changed company that is "transforming" tobacco. But the tobacco giant’s actions don’t show change, but more of the same.

Rather than changing, Reynolds continues to market its products to kids, mislead the public about the health risks of its products and fight proven strategies that prevent kids from smoking and reduce the death and disease caused by its products. Far from being part of the solution, Reynolds remains a main cause of the tobacco epidemic, which is the leading cause of preventable death in the United States and kills more than 400,000 Americans every year.

Consider the facts:

• Reynolds markets its most popular cigarette and smokeless tobacco brands to kids. Grizzly is the most popular smokeless tobacco brand among youth and young adults (preferred by 43.4 percent of smokeless tobacco users ages 12-17 and 38.7 percent of those ages 18-25). Camel is the third most popular cigarette brand among youth (preferred by 15.1 percent of smokers ages 12-17). (Data source: 2011 National Survey on Drug Use and Health issued by the federal Substance Abuse and Mental Health Services Administration)
• Reynolds’ Santa Fe subsidiary continues to mislead consumers about the health risks of smoking with advertising for its Natural American Spirit cigarette. Recent ads are rife with claims that imply a safer cigarette, including "100% additive-free natural tobacco," "organic" and "eco-friendly." These claims overwhelm a small disclaimer stating, “No additives in our tobacco does NOT mean a safer cigarette.” There’s no evidence that these cigarettes expose smokers to any fewer toxins or are any less likely to sicken and kill them.
• While claiming that it wants to prevent kids from using tobacco and reduce the harm caused by smoking, Reynolds fights effective policies to achieve these goals, including higher tobacco taxes, smoke-free laws and strong warning labels. The company spent $14 million against a California ballot initiative to raise cigarette taxes last year, and they joined other tobacco companies in federal court suits aimed at blocking the Food and Drug Administration’s new cigarette warnings and restrictions on marketing to kids.
• While fighting real efforts to reduce tobacco use, Reynolds offers false solutions, such as its so-called "youth tobacco prevention program" called "Right Decisions, Right Now." Studies have found that such tobacco industry programs are ineffective at best and may even encourage kids to smoke. The U.S. Surgeon General, the National Cancer Institute and a federal court all have found no evidence that these programs are effective.
• Much of Reynolds’ claim of change is based on its support for a so-called “harm reduction” strategy that calls for promoting supposedly less-harmful tobacco products. However, Reynolds’ actions show that “harm reduction” is a smokescreen to cover up its continued focus on selling cigarettes and harmful smokeless tobacco products, such as Grizzly, that are popular with kids. Recent remarks by Reynolds’ President and CEO Daniel Delen betrayed the company’s real focus: Keeping the cigarette market as big as possible for as long as possible. In a November 2012 presentation to investors, Delen stated:

We have a little mantra inside of the company that we use, which we call the 80-90-90… We spend about 80 percent of our resources in the combustible space. The combustible space is still 80 percent, 80-plus percent of our operating income. We spend the majority of our resources still in the combustible space. 90 percent of the organizational focus, the human resources inside the company, are actually focused on the combustible space. And despite a lot of these new innovations that you see coming out, 90 percent of our R&D budgets are actually directed at the combustible category…. That is the category that's still going to deliver a lot of growth into the future…

Reynolds’ "harm reduction" strategy isn’t new and it isn’t real. Tobacco companies have presented "harm reduction" as the alternative to quitting tobacco since before the first Surgeon General’s report on the deadly consequences of smoking 49 years ago. To keep smokers from quitting, the industry rolled out supposedly safer products such as filtered, "light" or "low-tar" cigarettes. And in the early 1980s, tobacco companies introduced sophisticated new smokeless tobacco products that they marketed as an innovative alternative to smoking. These products did nothing to reduce the death and disease caused by tobacco use. The result was more people using tobacco, especially children, and fewer people quitting. There is no reason to believe this time would be any different.

In 2006, U.S. District Court Judge Gladys Kessler found R.J. Reynolds and other tobacco companies guilty of violating civil racketeering laws and engaging in a decades-long fraud to deceive the American people. Here’s what she wrote in her verdict:

[This case] is about an industry… that survives, and profits, from selling a highly addictive product which causes diseases that lead to a staggering number of deaths per year, an immeasurable amount of human suffering and economic loss, and a profound burden on our national health care system. Defendants have known many of these facts for at least 50 years or more. Despite that knowledge, they have consistently, repeatedly and with enormous skill and sophistication, denied these facts to the public, the Government, and to the public health community.

Is Reynolds truly transformed? The evidence clearly shows otherwise. The American people and their elected leaders should not be fooled again.