Tobacco Chief Denies Targeting Kids
MIAMI (AP) - In a deposition given one week before two studies found an increase in cigarette advertising in magazines popular among teen-agers, the CEO of Philip Morris Inc. rejected accusations that his company's ads target children.
``It's bad for my business for kids to be buying cigarettes,'' Michael Szymanczyk, president and CEO of Philip Morris Inc., said in the May 10 deposition, obtained by The Associated Press.
The Virginia Slims theme ``Don't let the goody-two-shoes get you down'' is ``absolutely not'' telling kids to ignore health warnings from their parents, doctors and surgeons general, and it is actually pitched to adult women who smoke other brands, Szymanczyk said in the sworn statement.
``I reject the premise that we have any interest in replacing smokers or recruiting new smokers in its entirety,'' he said.
When asked if adolescent boys are reading the Sports Illustrated swimsuit edition, Szymanczyk, a father of three older boys, said, ``I should hope not'' because company ads in the magazine are based on its adult circulation.
The two studies, both released May 17 after his statements, indicated cigarette makers increased advertising in magazines with large teen readerships, despite a 1998 agreement in lawsuit settlements with states not to market to young people.
``We believe we have adhered to both the letter and the spirit of the tobacco settlement,'' Philip Morris spokesman Tom Ryan said after the studies were released.
Tobacco company Brown & Williamson disputed the studies' method of assessing readership.
While the industry is committed to advertising in magazines with less than 15 percent teen-age subscribers, ad decisions are based on subscription numbers rather than actual readership.
Szymanczyk's deposition was taken in preparation for his testimony against a potentially record-breaking punitive damage award in a landmark class-action smokers lawsuit in Florida. Opening statements begin Monday in Miami.
The jury already has ruled against the industry twice, deciding the nation's five biggest cigarette makers conspired to produce a deadly product and awarding $12.7 million in compensatory damages to three smokers representing an estimated 500,000 sick Florida smokers.
Industry-leading Philip Morris, a subsidiary of Philip Morris Cos. Inc., had half of the U.S. cigarette market and $19.6 billion in revenues last year. Its Marlboro line, the dominant national brand, accounted for 36 percent of all domestic sales.
But Szymanczyk calls domestic cigarette sales a ``declining business.'' He believes his task is to build profits and market share through brand switching among existing adult smokers.
Smokers' attorney Stanley Rosenblatt asked, ``It's the public position of Philip Morris that they do not market to kids, to underage people, correct?''
Szymanczyk answered, ``Absolutely.''
When asked the health consequences of smoking, Szymanczyk said, ``I think smoking is bad for your health.''
He refused to be pinned down on whether smoking causes lung cancer or other diseases, saying the industry adopted a policy in 1997 to cite the position of public health authorities on smoking and disease.
``The company's position is that there is an overwhelming scientific and medical consensus that smoking causes lung cancer and emphysema and other diseases,'' Szymanczyk said.
Rosenblatt asked, ``Has Philip Morris ever said on its Web site or anywhere else that we as a company agree with that consensus?''
Szymanczyk responded, ``We have not.''
In recent years, the industry has been inching away from its previous long-standing position that smoking was neither addictive nor cancer-causing by subtly shifting its rhetoric and addressing health issues for smokers on its Web sites, while consistently pointing out that it does not endorse the scientific consensus.
Asked about the potential for a huge punitive verdict in the Florida case, he said his company could not afford to split a $50 billion punitive verdict in the class-action suit, but he doesn't know if a verdict that size would push the company into bankruptcy.
``To my knowledge we wouldn't be able to pay it,'' he said, estimating Philip Morris' net worth at $7.1 billion. ``We would not be able to pay this money if it was due in 30 days or in two years for that matter. We wouldn't be able to pay that money.''
Szymanczyk's salary is $810,000, his 1999 bonus was $850,000, and he receives stock options. He joined Philip Morris in 1990 as senior vice president of sales after a career in sales.