New Studies Undermine Philip Morris’ Claim It Has Changed: Company Profits from Kids, While Its Marlboros Kill Millions

Statement by Matthew L. Myers, President Campaign For Tobacco-Free Kids

Mar. 23 2006

Washington, DC — Philip Morris has spent hundreds of millions of dollars on a public relations campaign claiming it is a changed, responsible company. But two new studies published today in the journal Tobacco Control paint a very different picture. One study shows that Philip Morris earns more revenue from cigarettes smoked by American kids than all other tobacco companies combined and its youth-generated revenue actually increased from 1997 to 2002. The second study shows that Philip Morris’ best-selling Marlboro cigarettes were responsible for more than 2.3 million deaths in the United States over the past 50 years and, if current trends continue, will contribute to another 1.6 million deaths in the U.S. over the next 10 years.

Despite the harm caused by Marlboro, Philip Morris last year found the 50-year anniversary of its modern Marlboro marketing campaign to be a cause for celebration, holding glitzy parties around the country. Philip Morris' celebration of a product that addicts so many children and causes so much death and suffering shows that it isn't the changed, responsible company it claims to be.

The first study, led by researchers at the American Legacy Foundation, calculates the total amount of tobacco industry revenue generated by youth smoking in 1997 and 2002 and the amount of youth-generated revenue received by each of the major tobacco companies. It finds that, in 2002, the tobacco companies earned $1.2 billion in revenue from cigarettes smoked by American kids. Fifty-eight percent of that youth-generated revenue goes to Philip Morris USA, 18 percent to Lorillard, and 12 percent to R.J. Reynolds, the study finds. Surveys show that Philip Morris’ Marlboro, Lorillard’s Newport and R.J. Reynolds’ Camel are the three most popular cigarette brands among youth, with Marlboro claiming nearly half the youth market (the Tobacco Control study’s estimates of youth-generated revenue included other cigarette brands as well). Despite the decline in youth smoking from 1997 to 2002, this study finds that total tobacco industry revenue generated by youth smoking actually increased because of cigarette price increases.

The second study, led by researchers at the Roswell Park Cancer Institute in Buffalo, New York, calculates the number of deaths attributable to Philip Morris’ Marlboro cigarettes over the past 50 years, from the time Philip Morris repositioned Marlboro from a feminine brand to one featuring the masculine Marlboro cowboy and western imagery. Taking into account a 10-year latent period between smoking and disease, the study finds that Marlboro cigarettes have killed more than 2.3 million Americans since 1955 with another 1.6 million deaths expected in the next 10 years. In 2005, the study estimates that Marlboro accounted for 30 percent of all smoking-attributable deaths in the United States. From 1971 to 2005, Marlboro’s share of the cigarette market in the U.S. climbed from just over 10 percent to more than 40 percent.

Marlboro’s popularity among youth and the staggering number of deaths it has caused are no accident. They are the direct result of Philip Morris’ aggressive and highly effective marketing of the Marlboro brand, often in ways that appeal to youth. While Philip Morris claims that it has curtailed its marketing, the fact is that since the 1998 state tobacco settlement, Philip Morris and the other tobacco companies have increased total cigarette marketing expenditures by 125 percent to $15.1 billion in 2003, the most recent year for which the Federal Trade Commission has reported cigarette marketing expenditures (the FTC does not break down marketing by company). The bulk of this marketing is now concentrated on price discounts, which have the greatest impact on youth, the most price-sensitive customers. Philip Morris and the other tobacco companies know that kids are more price-sensitive than adults, but that doesn’t stop them from making cigarettes more affordable and attractive to kids.

In another example of marketing that is effective at reaching and appealing to kids, Philip Morris also continues its Marlboro brand sponsorship of auto racing teams, sponsoring teams both in the United States in the Indy Racing League and internationally on the Formula One circuit. In its racketeering lawsuit against the tobacco companies, the U.S. Department of Justice charged that through these two sponsorships Philip Morris was circumventing a provision of the state tobacco settlement restricting tobacco companies to just one brand name sponsorship (Philip Morris USA’s executive claimed that the Formula One sponsorship was by Philip Morris International and not covered by the settlement, although both involve the Marlboro brand). Both Indy Racing League and Formula One races are heavily televised, beaming the Marlboro logo to millions of youth watching in the United States and around the world. While other tobacco companies have recently ended their sponsorship of Formula One teams because the European Union and other countries have banned such sponsorships, Philip Morris announced it was renewing the Marlboro sponsorship until 2011 in countries where such sponsorships are allowed. As a result, the Marlboro logo will continue to be associated with the glamour and excitement of cars speeding at over 200 miles an hour and it will continue to be televised back to countries that have sought to protect their kids by banning such sponsorships.

Philip Morris also continues to oppose proven policies and programs to reduce tobacco use. Recently, Philip Morris sought to join a Delaware lawsuit brought by Lorillard to stop the American Legacy Foundation’s hard-hitting truth® anti-tobacco advertising campaign, which has helped to drive down youth smoking rates. Philip Morris has also opposed cigarette tax increases in many states despite knowing that such increases will reduce smoking, especially among kids.

For all its rhetoric and high-powered public relations efforts, Philip Morris hasn’t fundamentally changed. A new name (Altria), expensive public relations campaigns and some well-publicized philanthropy can’t hide Philip Morris’ continuing irresponsible corporate behavior. The millions of families in the United States and around the world that have been decimated by the disease and death caused by Philip Morris’ products can find little to celebrate about 50 years of Marlboro marketing.

 

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