PMI Targets Developing World with Marketing Tactics Prohibited or No Longer Used in U.S., Other Developed Nations

WASHINGTON, D.C. — Since being spun off from its U.S. parent company a year ago, Philip Morris International (PMI) has targeted developing countries with marketing tactics that are prohibited in the U.S. and other developed nations or that PMI leaders themselves have publicly announced they would no longer use.

PMI has reaped enormous profits from targeting its deadly and addictive products in developing countries least equipped to deal with the devastating health consequences of tobacco use. As PMI holds its 2009 meeting of shareholders today in New York City, youth from around the world will demonstrate outside the meeting to protest the company’s targeting of their generation.

PMI’s recently released 2008 annual report – its first as a separate company from Altria – shows that the company’s most dramatic growth is occurring in emerging markets where it aggressively engages in tactics no longer seen in the U.S. and elsewhere, such as concert and sports sponsorships, and billboard advertising.

The company’s net revenues over the past year are up 21.8 percent in Eastern Europe, Middle East and Africa, 10.1 percent in Asia, and 23 percent in Latin America and Canada. According to PMI’s 2008 annual report, the company’s shipped cigarette volume is up 2.5 percent, which translates into 869.8 billion cigarettes, or 128 cigarettes for every person in the world.

This increase in cigarette use is compounding an already huge and growing public health crisis. According to the World Health Organization, tobacco use already kills 5.4 million people a year and the epidemic is worsening, especially in the developing world where more than 80 percent of tobacco-caused deaths will occur in the coming decades. Unless urgent action is taken to reverse current trends, tobacco is projected to kill one billion people this century.

As tobacco use continues to decrease in the United States and other western countries, PMI is adapting to the global market by targeting developing markets such as Indonesia, Russia, Turkey and Mexico.

“PMI’s deadly market growth is being achieved in large part due to aggressive and deceptive marketing activities that are no longer tolerated in the United States, where the shareholder meeting is taking place,” said Matthew L. Myers, President of Campaign for Tobacco-Free Kids. “Governments of nations where PMI operates should be alarmed by the devastating health and economic harms inflicted by big international tobacco companies and adopt policies proven to reduce tobacco use.”

Examples of PMI’s tactics include:

• Launching high tar and nicotine products in Indonesia.

PMI introduced a cigarette that delivers higher levels of nicotine and tar than a regular Marlboro. Introduced in 2007, Marlboro Mix 9 is a variant of a kretek cigarette, which is the type of cigarette used by an estimated 92 percent of smokers in Indonesia. Along with billboards of the Marlboro Man riding high above Indonesian cities, Marlboro Mix 9 is intended to acquaint consumers with the global Marlboro brand and introduce them to traditional Marlboro cigarettes.

• Recycling the fraudulent marketing of “low tar” products from the U.S. to at least 20 markets throughout the world.

In 2006, a U.S. Federal District Court found that PMI and other tobacco companies knew for decades that there were no health benefits from smoking “low-tar” cigarettes, yet falsely marketed such products as safer to sustain profits. PMI is now using this same tactic internationally.

One example is the introduction of Marlboro Filter Plus in countries such as Russia, Ukraine and Brazil. The package resembles a mobile phone and is marketed as having a “unique, multi-chamber filter” allegedly delivering lower tar levels and a smooth taste. PMI’s own consumer research has shown that “between 40% and 60% of Marlboro Filter Plus smokers are Young Adult Smokers,” according to June 2008 remarks by a PMI executive.

• Engaging in marketing that appeals to youth.

PMI has used marketing activities such as concert sponsorships that appeal to young people. In Mexico, Philip Morris sponsored a series of four concert series entitled Marlboro MXBeat that appealed to youth, featuring performers and acts widely popular with children and teenagers.

Similarly, PMI’s Indonesian subsidiary Sampoerna sponsored and heavily advertised an Alicia Keys concert in Indonesia. Keys ultimately demanded the withdrawal of tobacco industry sponsorship of her concert.

• Aggressively targeting women with marketing that also influences girls to smoke.

Research has shown that targeted marketing affects smoking rates among young women. PMI is using aggressive marketing campaigns overseas to target potential female customers. PMI has introduced slim and superslim cigarettes through its Marlboro Gold Eagle, Virginia Slims Uno, and Muratti Gold Slims in Eastern Europe, Japan and Greece. PMI has also introduced Indonesia’s women to the first superslims kretek called A Volution, with packaging that looks like a lipstick tube.

To combat the tobacco industry’s tactics, governments should use today’s PMI meeting as an urgent reminder to take action to protect the health of their citizens. The Framework Convention on Tobacco Control – the World Health Organization’s treaty aimed at reducing tobacco use – requires ratifying countries to implement proven measures to reduce tobacco use and its terrible toll in health, lives and money.

These measures include banning all tobacco advertising, promotion and sponsorship; increasing taxes on tobacco products; placing large, graphic health warnings on tobacco packs; implementing comprehensive measures to protect people from secondhand smoke; and prohibiting the use of false and misleading terms such as “light” and “low-tar.”

If effectively implemented, the tobacco treaty will be a fundamental turning point in reducing tobacco use and its devastating consequences around the world. So far, 168 nations have signed the treaty and 164 have ratified it.