Philip Morris Says Government Regulations Would Help It to Develop 'Reduced-Risk' Tobacco
RICHMOND, Va. (AP) -- Federal and international tobacco regulations would help Philip Morris Inc. develop a ``reduced risk'' cigarette, the company's chairman told shareholders Thursday.
Geoffrey C. Bible also said Philip Morris, the world's largest cigarette maker, should have a say in developing the regulations.
``We look forward to taking part in the process of creating a new and rational regulatory environment for the manufacture, sale and marketing of cigarettes -- one that addresses health issues while respecting the principle of freedom of choice among adults,'' Bible said at the annual shareholders meeting.
``Regulation also would provide guidance and support for our efforts to produce reduced risk tobacco products,'' he said. ``It would help us to define what is meant by ``reduced risk' and how such products would be produced and marketed.''
Philip Morris, which is developing a cigarette with lower levels of some cancer-causing substances, has been lobbying Congress for federal regulation. Bible said company officials also support global regulation through a World Health Organization treaty, which the 191 member governments will discuss Monday.
Thursday's speech was the first time Bible has told shareholders why the company is advocating government regulation. Tobacco industry critics are skeptical of Philip Morris' motives.
``The regulation he's talking about is regulation written by his company's lawyers,'' said Edward L. Sweda Jr., senior attorney for the Tobacco Control Resource Center at Northeastern University in Boston. ``We're leery of that based on a track record of a half-century of corporate misbehavior.''
A board member of the corporate watchdog organization INFACT told Bible during a shareholders' question-and-answer session that Philip Morris should not have a voice in writing regulations.
``That's like having the Ku Klux Klan help develop civil rights laws,'' said the San Diego man, who goes only by the name Akili.
Bible said it would be ``very un-American'' to suggest tobacco companies should not be involved.
Philip Morris accounts for half of the cigarettes sold in the United States with brands including Marlboro, Virginia Slims and Merit. On Wednesday, it boosted wholesale prices by 14 cents a pack for the second time in just over four months. That could mean even higher prices for smokers at the cash register.
Philip Morris' food business trails only Nestle SA in that industry. Its holdings include Kraft, Oscar Mayer, Miller Brewing Co. and Nabisco, which it bought last year for $14.9 billion. Among the products sold by the combined food companies are Kool-Aid, Jell-O, Post cereals, Altoids mints, LifeSavers, Toblerone chocolate and Tombstone pizza.
The company plans to sell a minority stake in its food holdings later this year in an initial public stock offering. Bible told shareholders that Securities and Exchange Commission rules prohibited him from discussing the offering.
Shareholders overwhelmingly rejected proposals to warn people about the hazards of secondhand smoke, ensure that tobacco ads do not appeal to youths, phase out genetically engineered food, stop funding smoking-related research using animals, better inform consumers about smoking risks, and adopt a global human rights policy.
The company's board recommended defeat of the proposals.
Outside the sprawling cigarette factory where shareholders met, anti-tobacco activists promoted a boycott of Kraft Foods begun by INFACT in 1994 and intensified in 1999 when Philip Morris began an ad campaign promoting its charitable works.
``We're here to demand that Philip Morris stop using ads that appeal to kids,'' said Kim Foltz of Boston, an INFACT member. ``Specifically, we want them to drop the Marlboro Man.''
Critics say the rugged cowboy mascot for Marlboro cigarettes is designed to appeal to children. Bible said all the company's marketing is aimed at adults, and Philip Morris has no intention of retiring the Marlboro Man.
In trading Thursday on the New York Stock Exchange, Philip Morris was up 20 cents to close at $50.90 a share.