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Philip Morris takes aim at young people in India, and health officials are fuming

The tobacco giant is pushing Marlboros in colorful ads at kiosks and handing out free smokes at parties frequented by young adults – tactics that break India’s anti-smoking laws, government officials say. Internal documents uncovered by Reuters illuminate the strategy.

http://www.reuters.com/investigates/special-report/pmi-india/

S. K. Arora spent more than three years trudging through the Indian summer heat and monsoon rains to inspect tobacco kiosks across this sprawling megacity, tearing down cigarette advertisements and handing out fines to store owners for putting them up.

But as fast as he removed the colorful ads, more appeared.

The chief tobacco control officer at the Delhi state government, Arora asked the major cigarette companies to put a stop to the cat-and-mouse routine. In official letters and face-to-face meetings, he told them India’s tobacco control laws barred such public advertising and promotion of cigarettes.

That included the Indian arm of Philip Morris International Inc, the world’s largest publicly traded tobacco company. Early last year, Arora said, he met with a Philip Morris director for corporate affairs in India, a man named R. Venkatesh, and told him the signs were an unequivocal violation of Indian law.

Like other tobacco companies, Philip Morris kept up its ad blitz.

Venkatesh says Philip Morris is doing nothing wrong. In response to questions from Reuters, he said the company’s advertising is “compliant with Indian law” and that Philip Morris has “fully cooperated with the enforcement authorities” on the matter.

But Indian government officials say Philip Morris is using methods that flout the nation’s tobacco-control regulations. These include tobacco shop displays as well as the free distribution of Marlboro – the world’s best-selling cigarette brand – at nightclubs and bars frequented by young people.

In internal documents, Philip Morris International is explicit about targeting the country’s youth. A key goal is “winning the hearts and minds of LA-24,” those between legal age, 18, and 24, according to one slide in a 2015 commercial review presentation.

As with the point-of-sale ads at kiosks, public health officials say that giving away cigarettes is a violation of India’s Cigarettes and Other Tobacco Products Act and its accompanying rules.

Philip Morris’ marketing strategy for India, which relies heavily on kiosk advertising and social events, is laid out in hundreds of pages of internal documents reviewed by Reuters that cover the period from 2009 to 2016. In them, Philip Morris presents these promotions as key marketing activities. In recent years, they have helped to more than quadruple Marlboro’s market share in India, where the company is battling to expand its reach in the face of an entrenched local giant. Reuters is publishing a selection of those documents in a searchable repository, The Philip Morris Files.

The company’s goal is to make sure that “every adult Indian smoker should be able to buy Marlboro within walking distance,” according to another 2015 strategy document.

In targeting young adults, Philip Morris is deploying a promotional strategy that it and other tobacco companies used in the United States decades ago. A study published in the American Journal of Public Health in 2002 found that during the 1990s, “tobacco industry sponsorship of bars and nightclubs increased dramatically, accompanied by cigarette brand paraphernalia, advertisements, and entertainment events in bars and clubs.”

With cigarette sales declining in many countries, Philip Morris has identified India, population 1.3 billion, as a market with opportunity for significant growth. “India remains a high potential market with huge upside with cigarette market still in infancy,” says a 2014 internal document.

According to government data, India has about 100 million smokers. Of those, about two-thirds smoke traditional hand-rolled cigarettes. Tobacco use kills more than 900,000 people a year in India, and the World Health Organization estimates that tobacco-related diseases cost the country about $16 billion annually.

Philip Morris is not alone in using marketing methods that Indian officials say are illegal. The country’s largest cigarette maker, ITC Ltd, uses similar tactics, such as advertising at kiosks. British American Tobacco Plc and Indian state-run companies have large, passive stakes in ITC, which controls about 80 percent of the market.

Tobacco-control officer Arora, a short, mustachioed man with a gruff demeanor, sent a letter to Philip Morris and other tobacco companies in mid-April, giving them until the end of the month to remove all advertisements. “Legal action will be initiated against the company” if it did not comply, he wrote in the letters, copies of which were reviewed by Reuters.

A day after Arora’s deadline passed, he and his team conducted a raid in an affluent area of cafes and coffee shops in New Delhi that showed his letters did not have the desired effect.

On that hot afternoon in May, the team cut down about a dozen advertisements for Marlboro and various ITC brands. As word of the raid spread, worried vendors covered their ads with newspapers or took them down.

One kiosk owner, Rakesh Kumar Jain, removed his Marlboro ads before Arora’s team arrived. Jain said the signs had been put up by Philip Morris representatives. In return, he said, he received free cigarettes each month worth about 2,000 rupees (about $30). Jain knew that putting up the posters was illegal, but they helped improve sales, he said.

About a dozen kiosk owners interviewed by Reuters said that tobacco companies paid them a monthly fee for advertisements and product displays, with the amount determined by factors such as location, volume of business and type of promotional material.

In payment receipts seen by Reuters, Philip Morris’ India unit promised to pay 500 Indian rupees ($7.50) a month to a cigarette seller with a small roadside kiosk in New Delhi for putting up Marlboro ads. The receipts were signed by a company representative.

During the raid, fines were issued to some vendors, many of them repeat offenders, and they were threatened with court action if the ads went up again.

Like Philip Morris, ITC says that it is in full compliance with India’s 2003 tobacco control law. If it wasn’t, the company said in a statement to Reuters, then “the relevant government authorities would have initiated action.”

Since Arora’s threat of legal action in April, there are fewer Philip Morris advertisements outside cigarette shops in the capital. But both Philip Morris and ITC say that advertising inside a shop is allowed.

“Advertisements of tobacco products at the entrance and inside the shops selling tobacco products are clearly and categorically permitted,” ITC said in response to questions from Reuters.

Arora, however, said all advertising is prohibited – “There are no two ways about it,” he insisted – but he can’t start legal proceedings until getting further guidance from the federal government. He has yet to receive an answer.

Federal health officials say in interviews that the ads are out of bounds. Amal Pusp, a director for tobacco control at the health ministry, told Reuters that “there is no confusion”: All advertisements – inside and outside shops – are illegal.

The 2003 law allows tobacco companies to advertise at shops, but subsequent rules issued by the government prohibit it.

“India remains a high potential market with huge upside with cigarette market still in infancy.”

From a 2014 internal Philip Morris document

In 2004, India became one of the first countries to ratify the World Health Organization’s Framework Convention on Tobacco Control (FCTC) treaty. The pact has 181 members and contains a raft of anti-smoking provisions, including tobacco taxes, warning labels on cigarette packs and advertising bans. The country enacted its national tobacco control law the year before ratifying the FCTC, and since then the government has added rules to strengthen the law in line with the treaty’s provisions.

The health ministry published rules in 2005 that banned any display of brand names, pack images or promotional messages. The rule specified that tobacco retailers could only display a 60-by-45 centimeter board, roughly 24 by 18 inches. The sign can have a description of the type of tobacco products sold – such as cigarettes or chewing tobacco – but cannot include any brand advertising and must carry a large health warning.

The health ministry’s rules were challenged in court by a group of cigarette distributors and put on hold by a state-level High Court for seven years. They finally came into force in 2013 on orders of India’s Supreme Court.

The High Court had overlooked the fact that advertisement of tobacco products “will attract younger generation and innocent minds, who are not aware of grave and adverse consequences of consuming such products,” the Supreme Court said in its ruling.

Philip Morris has lobbied against the passing of stricter tobacco control rules by the Indian government. In documents detailing the company’s plans for the biennial FCTC treaty convention in India last November, Prime Minister Narendra Modi emerges as a prime target. A key goal: to pre-empt Modi from taking “extreme anti-tobacco measures” before delegates were to gather from around the world for the treaty meeting, according to a 2014 corporate affairs PowerPoint presentation.

Excerpts from the Philip Morris Files

Reuters reviewed hundreds of pages of internal Philip Morris International documents relating to India. These excerpts show the company’s marketing and lobbying tactics, which are aimed at bolstering the Marlboro brand among young adults and blocking the “enactment of extreme anti-tobacco measures.” Letters from Indian officials detail the government’s efforts to enforce the country’s tobacco control regulations. (Some documents include highlighting by Reuters.)

A slide from a Philip Morris training manual shows the kinds of people the company aims to target for Marlboro sales in India. LAS = legal age smokers.

A slide from a Philip Morris training manual shows the kinds of people the company aims to target for Marlboro sales in India. LAS = legal age smokers.

A slide from a 2014 strategy presentation shows Philip Morris’ goals for marketing Marlboro Red in India. LA-24 = legal age to 24-year-old smokers.

A slide from a 2014 strategy presentation shows Philip Morris’ goals for marketing Marlboro Red in India. LA-24 = legal age to 24-year-old smokers.

This slide from a 2012 marketing presentation shows where Philip Morris planned to target 18-to-24-year-old smokers in India.

This slide from a 2012 marketing presentation shows where Philip Morris planned to target 18-to-24-year-old smokers in India.

A Philip Morris training manual lays out rules for how those marketing its cigarettes should look. FWP = field work personnel.

A Philip Morris training manual lays out rules for how those marketing its cigarettes should look. FWP = field work personnel.

Another slide from the Philip Morris training manual includes instructions for company representatives handing out free cigarettes at kiosks as part of brand promotion. (IPM = India Philip Morris; GPI = Godfrey Phillips India; POS = point of sale.)

Another slide from the Philip Morris training manual includes instructions for company representatives handing out free cigarettes at kiosks as part of brand promotion. (IPM = India Philip Morris; GPI = Godfrey Phillips India; POS = point of sale.)

Kiosk owners in Delhi say that Philip Morris pays them a monthly fee to put up its advertisements. Names have been redacted on this Philip Morris receipt.

Kiosk owners in Delhi say that Philip Morris pays them a monthly fee to put up its advertisements. Names have been redacted on this Philip Morris receipt.

Keshav Desiraju, then a senior health ministry official, wrote to state governments in January 2013, instructing them to stop all tobacco advertisements.

Keshav Desiraju, then a senior health ministry official, wrote to state governments in January 2013, instructing them to stop all tobacco advertisements.

 In April, S.K. Arora, the chief tobacco control officer in Delhi, warned Philip Morris International in a letter that it could face legal action over its advertising.

In April, S.K. Arora, the chief tobacco control officer in Delhi, warned Philip Morris International in a letter that it could face legal action over its advertising.

An excerpt from a 2013 letter from a health ministry official to state governments shows specifications for the board that can be displayed at shops selling tobacco products. According to Indian law, the board cannot include any brand names. Beedis are traditional hand-rolled cigarettes.

An excerpt from a 2013 letter from a health ministry official to state governments shows specifications for the board that can be displayed at shops selling tobacco products. According to Indian law, the board cannot include any brand names. Beedis are traditional hand-rolled cigarettes.

Ahead of the World Health Organization’s global tobacco control treaty meeting in India last November, Philip Morris planned to engage Prime Minister Narendra Modi in an effort to head off new anti-tobacco measures. The slide is from a 2014 corporate affairs document. CoP7 = Conference of the Parties, the biennial treaty meeting.

Ahead of the World Health Organization’s global tobacco control treaty meeting in India last November, Philip Morris planned to engage Prime Minister Narendra Modi in an effort to head off new anti-tobacco measures. The slide is from a 2014 corporate affairs document. CoP7 = Conference of the Parties, the biennial treaty meeting.

The company planned to gain Modi’s ear through those close to him. It identified several people in this group, including Commerce Minister Nirmala Sitharaman, Health Minister Jagat Prakash Nadda, and Amit Shah, president of the ruling Bharatiya Janata Party.

Modi and the other politicians didn’t respond to requests for comment. Philip Morris International also didn’t comment on the plan.

The tobacco giant’s efforts to fend off anti-smoking steps have had limited impact so far. Last year, for instance, India ordered manufacturers to cover 85 percent of the surface of cigarette packs with health warnings, up from 20 percent. The rule, which is still being challenged in a state court by the tobacco industry, including Philip Morris’ India partner, was implemented by order of the Supreme Court.

Marlboro has just a 1.4 percent share of the almost $10 billion cigarette market in India. The industry is dominated by ITC, which has a strong grip on distributors and retailers.

One major method Philip Morris is deploying to gain ground, the marketing documents show, is the free distribution of cigarettes at bars and nightclubs – known as Legal Age Meeting Points, or LAMPs, in company jargon. The hiring of young women and men to work at these gatherings is outsourced to event management companies, according to people with knowledge of the gatherings.

Some of the recruiting takes place online. “Hey girls…We are searching A++ Hot & Gorgeous girls for the Marlboro pub activity…Pay: 2000/day…Work: Promotion in clubs in Delhi,” read one post on a Facebook public group in June last year. There was no company name attached to the ad.

At several parties attended by Reuters in Delhi and Mumbai, young women dressed in the colors of the latest Marlboro variant handed out packs of cigarettes. During one party at a nightclub in a Delhi hotel, a young woman walked around with a tablet showing an ad that highlighted Marlboro features. A television screen played a video promoting the brand: “For trendsetters, for forward thinkers, a smooth and balanced smoking experience.”

In many ways, it was right out of the Philip Morris 1990s playbook. The American Journal of Public Health study, drawing on previously secret industry documents, found that Philip Morris ran bar promotions in 1990 using racing jackets, and added “neon message boards and cocktail trays” in 1991. The study described methods for collecting names for a company database “to generate smoker profiles, direct mailing campaigns, and conduct telephone research studies after the bar events.”

At the parties in India, people who took the Marlboro packs were asked their names, ages and preferred brands. Philip Morris calls this distribution of free cigarettes “sampling,” which it says in an internal document is allowed under the law.

The company has spent millions of dollars on these activities. In 2014, for example, Philip Morris estimated it spent $1.6 million on LAMP events and sampling at kiosks in India, according to the 2015 commercial review presentation.

The company planned to use LAMPs in 2015 to generate 30,000 “trials,” or samplings of cigarettes. And it planned to generate another 500,000 trials that year through sampling at cigarette shops and kiosks, according to the 2015 strategy document.

The company instructs employees to watch their words. An undated training manual for market researchers says: “Do not say this is a ‘PROMOTION’ or ‘ADVERTISING’.”

Indian health ministry officials say that anyone who hands out free cigarettes, whatever the circumstances, is breaking the law.

The Health Ministry’s Amal Pusp says the law against distribution of free cigarettes is unambiguous. He cites Section 5 of the country’s tobacco control act, which says: “No person, shall, under a contract or otherwise promote or agree to promote the use or consumption of” cigarettes or any other tobacco product. The law carries a fine of up to 1,000 rupees (about $15) and a sentence of up to two years in prison for a first conviction.

“We believe we market our products in a responsible manner, and in compliance with Indian regulations,” Philip Morris’ Venkatesh said, without elaborating.

In October last year, the month before India was due to host delegations from around the world at the biennial FCTC tobacco control conference in Delhi, tobacco-control officer Arora said he suddenly started getting traction.

The cigarette ads vanished and Delhi was “cleaned,” he said.

That success couldn’t have come at a better time for Arora and his colleagues at the federal health ministry: They wanted to make sure foreign delegates visiting India saw the country was serious about its tobacco regulations.

Weeks after the FCTC delegates left town in November, however, kiosks in the capital were again displaying ads for Marlboro.

STOREFRONT ADS: Marlboro advertisements can be seen on this kiosk in a marketplace in New Delhi in April. Despite warnings from health officials, Philip Morris has continued to advertise its Marlboro cigarettes. REUTERS/Adnan Abidi

STOREFRONT ADS: Marlboro advertisements can be seen on this kiosk in a marketplace in New Delhi in April. Despite warnings from health officials, Philip Morris has continued to advertise its Marlboro cigarettes. REUTERS/Adnan Abidi

Additional reporting by Aditi Shah in New Delhi, and Abhirup Roy and Swati Bhat in Mumbai.

The Philip Morris Files
By Aditya Kalra, Paritosh Bansal, Tom Lasseter and Duff Wilson
Design: Troy Dunkley
Photo Editing: Tom White and Altaf Bhat
Edited by Peter Hirschberg

Big tobacco bullies the global south. Trade deals are their biggest weapon

The industry has a long history of using trade to force their products into new markets. This has led to at least a 5% increase in cigarette deaths

https://www.theguardian.com/commentisfree/2017/jul/17/big-tobacco-trade-deals-new-markets-bat

Cigarette packets often carry the warning to “protect children: don’t make them breathe your smoke”. In 2014, the Kenyan government attempted to do just that – banning the sale of single cigarettes, banning smoking in vehicles with a child and keeping the tobacco industry out of initiatives aimed at children and young people.

But as the Guardian reported last week, British American Tobacco, in an effort to keep Kenyans breathing their smoke, fought the regulations on the grounds that they “constitute an unjustifiable barrier to international trade”.

In fact, big tobacco has a long history of using trade and investment rules to force their products on markets in the global south and attack laws and threaten lawmakers that attempt to control tobacco use.

Back in the 1980s, as cigarette consumption fell off in North America and western Europe, US trade officials worked aggressively to grant American companies access to markets in Asia, demanding not only the right to sell their products, but also the right to advertise, sponsor sports events and run free promotions. Smoking rates surged.

In the 1990s, World Trade Organisation agreements led to a liberalisation of the international tobacco trade, with countries reducing import tariffs on tobacco products. The impact, according to a joint study of the World Health Organisation and the World Bank, was a 5% increase in global cigarette consumption and accompanying mortality rates.

Big tobacco’s lawyers were quick to discover the value of “next generation” trade agreements. In the 1990s, Canada dropped a plain packaging initiative after US manufacturers threatened a suit using the first next-gen trade deal, the North American Free Trade Agreement (Nafta). A few years later, Philip Morris threatened Canada again after it prohibited terms such as “light” and “mild” cigarettes. Philip Morris argued it would be owed millions in compensation for damage to its brand identity.

Philip Morris was able to credibly wield this threat because of the extraordinary powers that Nafta grants international corporations: the right to sue governments in private tribunals over regulations that affect their profits.

A toxic combination of far-reaching and poorly defined “rights” for investors, eye-watering legal costs, and tribunals composed of corporate lawyers with the power to set limitless awards against governments makes investment arbitration and the modern “trade” agreement a formidable weapon to intimidate regulators.

And what big tobacco learned in the global north it has been replicating in the global south, where threats carry greater force against poorer countries that may lack the resources to see down a legal challenge.

In 2010, Philip Morris launched a $25m claim against Uruguay after it introduced graphic warnings on cigarette packs. Though Uruguay successfully defended the measure, it still faced millions in legal costs. And Philip Morris effectively won, as Costa Rica and Paraguay held off introducing similar measures.

Such are the fears around big tobacco’s aggressive use of trade and investment rules that the US-negotiated Trans-Pacific Partnership trade deal featured a carve-out excluding big tobacco from investment protections – an explicit admission of the problem.

But this does not go far enough. The important thing to realise is that the problem goes beyond big tobacco. Big oil, big pharma and big mining follow the same playbook, launching investment arbitration cases to defend their business models from governments that would regulate to protect public health, the local environment or the climate.

Rather than target individual companies or sectors, we must push our governments to reform trade and investment rules that grant such extraordinary powers to corporations. That means removing special investor rights and investment courts from trade agreements. It means removing limits on the freedom of governments to protect public health, labour and human rights and the environment.

Of course, this is easier said than done. Robert Lighthizer, US trade representative, served as deputy in a Reagan administration that pressured countries to open their tobacco markets to US exporters in the 1980s.

Vice-President Mike Pence’s record includes opposing smoking regulation, taking huge campaign donations from big tobacco, and denying the causal link between smoking and lung cancer. The EU commission, meanwhile, has been criticized for its meetings with big tobacco while it was negotiating EU-US trade talks.

The good news is that from Brazil to India to Ecuador, countries are stepping away from outdated trade and investment rules. In the UK, the Labour party manifesto opposes parallel courts for multinationals and proposes to review the UK’s investment treaties.

But until we scrap the powers that we grant big tobacco and others to frustrate and bypass our laws, efforts around the world to protect public health will continue to go up in smoke.

ANTI-TOBACCO : THE PR DAUTZENBERG DENOUNCES THE ACTIONS OF BAT

After the revelations from Reuters about the methods of lobbying from Philip Morris International, it is the turn of British American Tobacco (BAT) to suffer the blowback of its business strategy. And it was Professor Bertrand Dautzenberg, pulmonologist at the Pitié-Salpêtrière hospital in paris and secretary general of the Alliance against tobacco, which denounces the strategy of BAT.

https://sivertimes.com/anti-tobacco-the-pr-dautzenberg-denounces-the-actions-of-bat/54893

In a message posted on Twitter and an article in the Figaro, he denounces the attempt to approach the world leader in tobacco, which has sent a registered letter inviting him to discuss ” new product to reduced harm “, to ” change the software regarding the fight against smoking “.

Disagreement on the substance…

Ploom Japan Tobacco, iQos, Philip Morris, Glo BAT : these new devices are the link between the cigarette and the electronic cigarette. They do not use combustion but still contain tobacco. An electrical resistance heater at a low temperature, which would, inter alia, to delete the inhalation of tar and carbon monoxide, according to the manufacturers.

A statement that the Pr Dautzenberg contests. “The industry we swear that this heated tobacco is less toxic than cigarette smoking, but this is not proven at all, and there must be a little bit of burning still, since they found traces of carbon monoxide in the fumes, he said in Le Figaro. Today, tobacco kills one of its faithful consumers. Even if the tobacco said to be less of a risk” not to kill that one in three or one in ten, or even one in a hundred, it’s still unacceptable. “

The doctor also points out that this type of reflection had been carried out on cigarettes light. A reflection at the time supported by a part of the medical community, before it can be recognized that the risk was ultimately the same. Cigarettes light favored only other cancers of the respiratory tract.

Inside Philip Morris’ campaign to subvert the global anti-smoking treaty

The world’s largest publicly traded tobacco company is deploying its vast resources against international efforts to reduce smoking. Internal documents uncovered by Reuters reveal details of the secret operation.

http://www.reuters.com/investigates/special-report/pmi-who-fctc/

A group of cigarette company executives stood in the lobby of a drab convention center near New Delhi last November. They were waiting for credentials to enter the World Health Organization’s global tobacco treaty conference, one designed to curb smoking and combat the influence of the cigarette industry.

Treaty officials didn’t want them there. But still, among those lined up hoping to get in were executives from Japan Tobacco International and British American Tobacco Plc.

There was a big name missing from the group: Philip Morris International Inc. A Philip Morris representative later told Reuters its employees didn’t turn up because the company knew it wasn’t welcome.

In fact, executives from the largest publicly traded tobacco firm had flown in from around the world to New Delhi for the anti-tobacco meeting. Unknown to treaty organizers, they were staying at a hotel an hour from the convention center, working from an operations room there. Philip Morris International would soon be holding secret meetings with delegates from the government of Vietnam and other treaty members.

The object of these clandestine activities: the WHO’s Framework Convention on Tobacco Control, or FCTC, a treaty aimed at reducing smoking globally. Reuters has found that Philip Morris International is running a secretive campaign to block or weaken treaty provisions that save millions of lives by curbing tobacco use.

In an internal document, the company says it supported the enactment of the treaty. But Philip Morris has come to view it as a “regulatory runaway train” driven by “anti-tobacco extremists” – a description contained in the document, a 2014 PowerPoint presentation.

Confidential company documents and interviews with current and former Philip Morris employees reveal an offensive that stretches from the Americas to Africa to Asia, from hardscrabble tobacco fields to the halls of political power, in what may be one of the broadest corporate lobbying efforts in existence.

Details of those plans are laid bare in a cache of Philip Morris documents reviewed by Reuters, one of the largest tobacco industry leaks ever. Reuters is publishing a selection of those papers in a searchable repository, The Philip Morris Files.

Dating from 2009 to 2016, the thousands of pages include emails between executives, PowerPoint presentations, planning papers, policy toolkits, national lobbying plans and market analyses. Taken as a whole, they present a company that has focused its vast global resources on bringing to heel the world’s tobacco control treaty.

Philip Morris works to subvert the treaty on multiple levels. It targets the FCTC conferences where delegates gather to decide on anti-smoking guidelines. It also lobbies at the country level, where the makeup of FCTC delegations is determined and treaty decisions are turned into legislation.

Excerpts from the Philip Morris Files

Reuters uncovered thousands of pages of internal Philip Morris International documents. These excerpts show the company’s tactics for combating the Framework Convention on Tobacco Control, or FCTC, a treaty aimed at reducing smoking worldwide. (Some documents include highlighting by Reuters; some names have been redacted.)

01

A slide from a 2014 Philip Morris corporate affairs presentation about the FCTC, the global anti-smoking treaty. CoP5 and CoP6 refer to the biennial meetings of treaty nations in 2012 and 2014. “ENDS” refers to e-cigarettes.

Another slide from the 2014 PowerPoint presentation. “Paradigm shift” refers to an expected boom in what the company calls “reduced-risk products.”

Another slide from the 2014 PowerPoint presentation. “Paradigm shift” refers to an expected boom in what the company calls “reduced-risk products.”

A slide from the 2014 presentation shows Philip Morris plans for tracking anti-smoking groups, which the company calls anti-tobacco organizations, or ATOs.

A slide from the 2014 presentation shows Philip Morris plans for tracking anti-smoking groups, which the company calls anti-tobacco organizations, or ATOs.

The same 2014 document shows objectives for corporate affairs executives. “Roadblocks” refers to delays in implementing anti-smoking steps. “MoH” refers to ministries of health.

The same 2014 document shows objectives for corporate affairs executives. “Roadblocks” refers to delays in implementing anti-smoking steps. “MoH” refers to ministries of health.

Another slide from the 2014 document shows the characteristics that a Philip Morris corporate affairs (“CA”) person should possess.

Another slide from the 2014 document shows the characteristics that a Philip Morris corporate affairs (“CA”) person should possess.

A more detailed account of Philip Morris’ corporate affairs tactics from the same 2014 presentation.

A more detailed account of Philip Morris’ corporate affairs tactics from the same 2014 presentation.

A list of methods the company has devised for opposing the implementation of plain packaging, a measure advocated by the FCTC that bars the use of logos and distinctive coloring on cigarette packs.

A list of methods the company has devised for opposing the implementation of plain packaging, a measure advocated by the FCTC that bars the use of logos and distinctive coloring on cigarette packs.

This slide from the 2014 presentation shows some of the resources Philip Morris deployed at the FCTC treaty meeting in Moscow that year (CoP6), as the company looked ahead to the 2016 session in New Delhi (CoP7). ITGA = the International Tobacco Growers’ Association.

This slide from the 2014 presentation shows some of the resources Philip Morris deployed at the FCTC treaty meeting in Moscow that year (CoP6), as the company looked ahead to the 2016 session in New Delhi (CoP7). ITGA = the International Tobacco Growers’ Association.

Philip Morris pushes for more delegates to FCTC treaty meetings from government agencies that deal with economic and trade issues. This slide from the 2014 presentation shows the company’s plan to lobby for more delegates from outside of public health on India’s delegation at the treaty meeting last year.

Philip Morris pushes for more delegates to FCTC treaty meetings from government agencies that deal with economic and trade issues. This slide from the 2014 presentation shows the company’s plan to lobby for more delegates from outside of public health on India’s delegation at the treaty meeting last year.

Excerpt from an October 18, 2014, email from Chris Koddermann, who led the Philip Morris team at the treaty meeting in Moscow that year.

Excerpt from an October 18, 2014, email from Chris Koddermann, who led the Philip Morris team at the treaty meeting in Moscow that year.

An October 18, 2014, email from Nguyen Thanh Ky, a Philip Morris corporate affairs executive, about his meeting with the Vietnamese delegation to the 2014 Moscow treaty conference.

An October 18, 2014, email from Nguyen Thanh Ky, a Philip Morris corporate affairs executive, about his meeting with the Vietnamese delegation to the 2014 Moscow treaty conference.

Excerpt from an October 2014 email from Gustavo Bosio, then Philip Morris manager for international trade, a few days after the end of the Moscow meeting.

Excerpt from an October 2014 email from Gustavo Bosio, then Philip Morris manager for international trade, a few days after the end of the Moscow meeting.

Excerpt from a Philip Morris briefing paper on trade arguments, ahead of the treaty meeting in India last year. The company has long argued that the biennial Conference of the Parties (COP) should leave trade issues to the World Trade Organization (WTO).

Excerpt from a Philip Morris briefing paper on trade arguments, ahead of the treaty meeting in India last year. The company has long argued that the biennial Conference of the Parties (COP) should leave trade issues to the World Trade Organization (WTO).

Excerpt from a Philip Morris briefing paper on potential risks ahead of the treaty meeting last year, “COP7” in India. ENDS, or Electronic Nicotine Delivery Systems, refers to electronic cigarettes.

Excerpt from a Philip Morris briefing paper on potential risks ahead of the treaty meeting last year, “COP7” in India. ENDS, or Electronic Nicotine Delivery Systems, refers to electronic cigarettes.

Excerpt from a 2011 draft Philip Morris plan for responding to moves in Israel to pass new anti-smoking measures.

Excerpt from a 2011 draft Philip Morris plan for responding to moves in Israel to pass new anti-smoking measures.

 In this slide from a Japan corporate affairs presentation, some ministers in the Japanese cabinet are identified according to their positions on tobacco. The two ministers designated “Pro-tobacco” did not respond to questions from Reuters.

In this slide from a Japan corporate affairs presentation, some ministers in the Japanese cabinet are identified according to their positions on tobacco. The two ministers designated “Pro-tobacco” did not respond to questions from Reuters.

This slide, also from the Japan presentation, talks about Philip Morris Japan maintaining good relations with members of Japan’s FCTC delegation, and a Philip Morris executive meeting with members of the country’s FCTC delegation. (MOF = Ministry of Finance; MOFA = Ministry of Foreign Affairs; JT = Japan Tobacco.)

This slide, also from the Japan presentation, talks about Philip Morris Japan maintaining good relations with members of Japan’s FCTC delegation, and a Philip Morris executive meeting with members of the country’s FCTC delegation. (MOF = Ministry of Finance; MOFA = Ministry of Foreign Affairs; JT = Japan Tobacco.)

This slide, also from the Japan presentation, reveals the company’s plans for opposing moves in Australia to bar the use of logos or distinctive coloring on cigarette packs. The measure is known as plain packaging, or PP. The Tobacco Institute of Japan, or TIOJ, declined to comment.

This slide, also from the Japan presentation, reveals the company’s plans for opposing moves in Australia to bar the use of logos or distinctive coloring on cigarette packs. The measure is known as plain packaging, or PP. The Tobacco Institute of Japan, or TIOJ, declined to comment.

A slide from a Philip Morris training document.

A slide from a Philip Morris training document.

“Our everyday business”

Philip Morris International’s full response to Reuters findings:

“As a company in a highly regulated industry, speaking with governments is part of our everyday business. We publicly supported the creation of the framework convention on tobacco control, were involved in the consultation process prior to its establishment, but have not since been invited to contribute to any discussions on tobacco control measures. With our product knowledge, technical expertise and our vision to replace cigarettes with less harmful alternatives, we believe we have something to contribute and we look for a range of legitimate opportunities to express our views to decision-makers. The fact that Reuters has seen internal emails discussing our engagement with governments does not make those interactions inappropriate. We believe that the active participation of public health experts, policy-makers, scientists, and the industry is the best way to effectively address tobacco regulations in the genuine interest of today’s billion smokers. It is our hope that moving forward, all tobacco policy makers will invite open dialogue, and in the meantime we will continue to speak with governments about policies that can address the impact of smoking on health.”

– Tony Snyder, Vice President of Communications, Philip Morris International

The documents, combined with reporting in 14 countries from Brazil to Uganda to Vietnam, reveal that a goal of Philip Morris is to increase the number of delegates at the treaty conventions who are not from health ministries or involved in public health. That’s happening: A Reuters analysis of delegates to the FCTC’s biennial conference shows a rise since the first convention in 2006 in the number of officials from ministries like trade, finance and agriculture for whom tobacco revenues can be a higher priority than health concerns.

Philip Morris International says there is nothing improper about its executives engaging with government officials. “As a company in a highly regulated industry, speaking with governments is part of our everyday business,” Tony Snyder, vice president of communications, said in a statement in response to Reuters’ findings. “The fact that Reuters has seen internal emails discussing our engagement with governments does not make those interactions inappropriate.”

In a series of interviews in Europe and Asia, Philip Morris executive Andrew Cave said company employees are under strict instructions to obey both the company’s own conduct policies and local law in the countries where they operate. Cave, a director of corporate affairs, said that while Philip Morris disagrees with some aspects of the FCTC treaty and consults with delegates offsite during its conferences, ultimately the delegations “make their own decisions.”

“We’re respectful of the fact that this is their week and their event,” said Cave in an interview in New Delhi, as the parties to the treaty met last November. Asked in an earlier interview whether Philip Morris conducts a formal campaign targeting the treaty’s biennial conferences, Cave gave a flat “no.”

When the FCTC delegates gather, lives hang in the balance. Decisions taken at the conferences over the past decade, including a ban on smoking in public places, are saving millions of lives, according to researchers at Georgetown University Medical Center.

Between 2007 and 2014, more than 53 million people in 88 countries stopped smoking because those nations imposed stringent anti-smoking measures recommended by the WHO, according to their December 2016 study. Because of the treaty, an estimated 22 million smoking-related deaths will be averted, the researchers found.

According to the WHO, though, tobacco use remains the leading preventable cause of death – and by 2030 will be responsible for eight million deaths a year, up from six million now.

There was jubilation among anti-smoking advocates when the treaty was adopted in 2003. The treaty, which took effect in 2005, made it possible to push for measures that once seemed radical, such as smoke-free bars. About 90 percent of all nations eventually joined. A big holdout is the United States, which signed the treaty but has yet to ratify it.

Since the FCTC came into force, it has persuaded dozens of nations to boost taxes on tobacco products, pass laws banning smoking in public places and increase the size of health warnings on cigarette packs. Treaty members gather every two years to consider new provisions or strengthen old ones at a meeting called the Conference of the Parties, or COP, which first convened in 2006 in Geneva.

But an FCTC report shows that implementation of important sections of the treaty is stalling. There has been no further progress in the implementation of 7 out of 16 “substantive” treaty articles since 2014, according to a report by the FCTC Secretariat in June last year.

A key reason: “The tobacco industry continues to be the most important barrier in implementation of the Convention.”

Indeed, the tobacco industry has weathered the tighter regulation. There has been only a slight 1.9 percent decline in global cigarette sales since the treaty took effect in 2005, and more people smoked daily in 2015 than a decade earlier, studies show. The Thomson Reuters Global Tobacco Index, which tracks tobacco stocks, has risen more than 100 percent in the past decade, largely due to price increases.

“Some people think that with tobacco, you’ve won the battle,” said former Finnish Health Minister Pekka Puska, who chaired an FCTC committee last year. “No way,” he said. “The tobacco industry is more powerful than ever.”

With 600 corporate affairs executives, according to a November 2015 internal email, Philip Morris has one of the world’s biggest corporate lobbying arms. That army, and $7 billion-plus in annual net profit, gives Philip Morris the resources to overwhelm the FCTC.

The treaty is overseen by 19 staff at a Secretariat office hosted by the WHO in Geneva. The Secretariat spends on average less than $6 million a year. Even when buttressed by anti-smoking groups, the Secretariat is outgunned. Its budget for this year and last year for supporting the treaty clause on combating tobacco company influence is less than $460,000.

Vera Luiza da Costa e Silva, head of the FCTC treaty Secretariat, is the person tasked with preventing the industry from neutering the agreement.

In two interviews at her Geneva office, da Costa e Silva, a medical doctor who holds a PhD in public health and has a dyed pink streak in her hair, explained why the FCTC banned attendance by any member of the public at the 2014 biennial conference in Moscow. The ban came in response to efforts by tobacco executives to use public badges to get inside the venue, she said, adding that industry representatives then started borrowing badges from delegates they knew to gain entry.

“It’s a real war,” said da Costa e Silva.

tobacco

“Some people think that with tobacco, you’ve won the battle. No way… The tobacco industry is more powerful than ever.”

Former Finnish Health Minister Pekka Puska, who chaired an FCTC committee last year

But she had only a partial picture of the forces ranged against her. She wasn’t aware of the fact that Philip Morris had a large team operating throughout the convention in Moscow, or the details of its activities in New Delhi last November.

“This is so disgusting. These are the forces against which we have to work,” da Costa e Silva said in May after being told about the Philip Morris documents. “I think they want to implode the treaty.”

The idea of a global tobacco treaty had been discussed among health advocates since at least 1979, when a WHO committee suggested the possibility. Gro Harlem Brundtland, a former prime minister of Norway who became director-general of the WHO in 1998, made it happen.

She was aided by outrage over documents that surfaced as part of the landmark 1998 Master Settlement Agreement, in which the four largest U.S. tobacco companies agreed to pay more than $200 billion to 46 U.S. states. The internal communications showed that tobacco executives lied for years about their knowledge of the deadly nature of cigarettes.

A 1989 document revealed one company’s plan to fight threats to the industry. “WHO’s impact and influence is indisputable,” the document said. It went on to contemplate “countermeasures designed to contain/neutralize/re-orient the WHO.”

That company was Philip Morris.

In 2008, Altria Group Inc split up its Philip Morris business. Philip Morris USA, which remains a subsidiary of Altria, sells Marlboro and other brands in the United States. Philip Morris International was spun off, and handles business abroad. Since the split, Philip Morris International shares have more than doubled and Altria’s have more than tripled.

Philip Morris International’s operational headquarters are in Lausanne, Switzerland, down the street from a patch of Gallo-Roman ruins, in a sleek building with a cafeteria, gym and a patio facing Lake Geneva. From there, the company is working to hobble the treaty.

Internal company communications reveal the scope of Philip Morris’ operation during the 2014 FCTC treaty meeting in Moscow. The company set up a “Coordinating Room” that could seat 42 people, according to the 2014 PowerPoint presentation, titled “Corporate affairs approach and issues.”

Leading the operation was executive Chris Koddermann. Formerly a lawyer and lobbyist in Canada, Koddermann joined Philip Morris in 2010. He is now a director of regulatory affairs in Lausanne. The PowerPoint describes the ideal corporate affairs executive as someone who is able to “play the political game.” Koddermann previously worked for federal and provincial cabinet ministers in Canada, according to his LinkedIn profile.

Reached on his cell phone in March, Koddermann said he wouldn’t be able to meet and that any questions should be directed to Philip Morris International.

At the end of the Moscow meeting, on Oct. 18, 2014, Koddermann sent an email congratulating a 33-person Philip Morris team on their success in diluting or blocking measures intended to strengthen tobacco controls and reduce cigarette sales. The gains he touted at the end of the week-long conference were the culmination of a two-year effort, his email said.

The documents shed light on one key objective in Philip Morris’ FCTC campaign: Keep tobacco within the ambit of international trade deals, so that the company has a way to mount legal campaigns against tobacco regulations.

In Moscow, one proposal initially called for carving out tobacco from trade pacts. International trade treaties often include provisions, such as the protection of trademarks, that Philip Morris has used to challenge anti-smoking measures. If tobacco were taken out of the treaties, as suggested by the proposal, Philip Morris could be deprived of many such legal arguments.

An early draft asked parties to support efforts to exclude tobacco from trade pacts and to prevent the industry from “abusing” trade and investment rules. In the end, the proposal was watered down. The final decision only reminded parties of “the possibility to take into account their public health objectives in their negotiation of trade and investment agreements.” There was no mention of excluding tobacco.

Koddermann, in his email to colleagues on the last day of the conference, declared victory, describing the change as “a tremendous outcome.” Overall, the company achieved its “trade related campaign objectives,” including “avoiding a declaration of health over trade” and “avoiding the recognition of the FCTC as an international standard,” he wrote.

The win was significant. A former Philip Morris employee said the company has routinely used trade treaties to challenge tobacco control laws. The aim, he said, was “to scare governments away from doing regulatory changes.” Even though the tobacco industry has lost a series of major legal battles, its suits have served to discourage the implementation of regulations that curb smoking. Those delays can yield years of unimpeded sales.

As the Philip Morris PowerPoint presentation from 2014 put it: “Roadblocks are as important as solutions.”

One roadblock was a campaign to stop the 2011 introduction of rules in Australia banning logos and distinctive coloring on cigarette packs. The company’s litigation and arbitration against the measure ultimately were dismissed – but not before five countries filed complaints against Australia on the same subject at the World Trade Organization. The global trade body has yet to announce a decision in the matter.

The attempt to undo Australia’s regulations has had a chilling effect elsewhere. It slowed the introduction of plain-packaging rules in New Zealand. Citing the risk that tobacco companies may “mount legal challenges,” the government announced in 2013 that it was postponing the move and waiting to “see what happens with Australia’s legal cases.” The legislation is now scheduled to go into effect next year.

In his Moscow conference email, Koddermann also expressed pleasure at the fate of a proposal on farmers. Initial language would have recommended that countries restrict support for tobacco growers. The proposal was “significantly watered down,” he wrote. “This is a very positive result.”

Gustavo Bosio, at the time a manager for international trade, chimed in a few days after the conference in an email: “These excellent results are a direct consequence of the remarkable efforts of all PMI regions and markets during the past two years and throughout the intense week in Moscow.”

Philip Morris isn’t alone in seeking to weaken the treaty. Ahead of the 2012 FCTC conference, in Seoul, four cigarette giants – Philip Morris, British American Tobacco (BAT), Japan Tobacco International and Imperial Brands Plc – formed an “informal industry Working Group” to oppose various proposals on tobacco taxation, according to an internal BAT document reviewed by Reuters.

The 45-page paper, whose existence hasn’t been previously reported, noted that the group would coordinate “to the extent that these issues do not raise any anti-competitive concerns.” The paper outlined a global campaign planned by BAT to counter the FCTC, which was “increasingly going beyond” its mandate. And it listed objectives, including a bid to block discussions around the introduction of a minimum 70 percent tax on tobacco.

BAT declined to answer questions about the industry working group. Both Imperial and Japan Tobacco International said they didn’t want to comment on a document from a competitor. Japan Tobacco International said its tax experts met with counterparts from other tobacco companies to discuss treaty guidelines on taxation ahead of the 2012 conference. Philip Morris did not comment on the document.

The Philip Morris emails and documents don’t explicitly detail how the company pulled off the victories in Moscow. But they provide insight into the importance it places on wooing delegates.

The FCTC traditionally makes decisions by consensus, and so influencing a single national delegation can have an outsized impact. The treaty has a key clause meant to keep the industry from unduly influencing delegations. Article 5.3, as it’s known, says nations should protect their public health policies from tobacco interests. Guidelines that accompany Article 5.3 recommend that countries interact with the industry only when “strictly necessary.”

But the article – a single sentence – contains a loophole Philip Morris has exploited. The sentence ends with the words “in accordance with national law,” opening the door to arguments by pro-tobacco forces that any lobbying that’s legal in a certain country is permissible when interacting with that country’s representatives. They also argue that a sentence in a related document, the guidelines for Article 5.3, allows for such interactions to take place as long as they are conducted transparently.

Philip Morris International: Facts & figures

• Has its roots in a small tobacconist shop in London in 1847.
• Now operates in more than 180 markets.
• Famous for its iconic Marlboro Man advertising.
• Has six of the world’s top 15 cigarette brands, including Marlboro, L&M and Chesterfield.
• Spun off from the Richmond, Va.-headquartered Altria Group in March 2008.
• Operational headquarters are in Switzerland.
• Produces over 800 billion cigarettes a year.
• Share price has more than doubled since the 2008 spin-off from Altria.

Sources: Philip Morris International website; Reuters reporting

Lobbying strategy

The Philip Morris International documents uncovered by Reuters include guidelines and country-specific lobbying plans aimed at hobbling the WHO’s global tobacco control treaty and national anti-smoking measures. Strategies include:
• Lobbying lawmakers, bureaucrats and other government officials
• Trying to move tobacco issues away from health departments
• Deploying third parties, including retail groups, to make its case and exert pressure on decision-makers
• Engaging the media on tobacco issues and generating public debate to influence decision-makers

The tabs below show the company’s strategy in action in three countries in recent years, according to internal company documents. The extent to which Philip Morris’ actions affected the outcome in each case is unclear.

In September 2011, Israel’s health ministry proposed new measures to regulate flavoring and advertising of tobacco products. In a draft company strategy document from October 2011, Philip Morris said the proposals included “a few excessive and disproportionate measures” such as restricting the use of fruit or chocolate flavorings in tobacco products, and broadly prohibiting advertising and marketing of tobacco. Elements of the campaign: 1: Leverage established relationships with different government ministries, mobilize retailers to advocate against “excessive” provisions, and lobby the health ministry. 2: Lobby the government through third parties such as an Israel-based supplier of licorice. 3: Use Philip Morris’ database of more than 60,000 adult smokers to reach consumers and create a public debate through the media “to influence MPs,” or members of parliament. OUTCOME: The bans on advertising and ingredients did not go through.

In September 2011, Israel’s health ministry proposed new measures to regulate flavoring and advertising of tobacco products. In a draft company strategy document from October 2011, Philip Morris said the proposals included “a few excessive and disproportionate measures” such as restricting the use of fruit or chocolate flavorings in tobacco products, and broadly prohibiting advertising and marketing of tobacco. Elements of the campaign:
1: Leverage established relationships with different government ministries, mobilize retailers to advocate against “excessive” provisions, and lobby the health ministry.
2: Lobby the government through third parties such as an Israel-based supplier of licorice.
3: Use Philip Morris’ database of more than 60,000 adult smokers to reach consumers and create a public debate through the media “to influence MPs,” or members of parliament.
OUTCOME: The bans on advertising and ingredients did not go through.

A 2010 Philip Morris document shows the company drawing up plans to lobby Sweden in an effort to influence the European Commission’s new tobacco regulations for member states, known as the Tobacco Products Directive (TPD). Elements of the campaign: 1: Engage the justice ministry to “put pressure” on the health ministry so that the Swedish representative on the European Commission committee opposes plain packaging and “excessive” health warning labels, and supports lifting the ban on snus, a smokeless tobacco product. 2: Build a “broad coalition” of “third-party stakeholders,” such as the Stockholm Chamber of Commerce, and get them to pressure the government. (The chamber told Reuters that it does not lobby on behalf of individual companies.) 3: Establish a retailer network and contact bloggers and journalists to voice concerns about issues, including plain packaging and point-of-sale display bans. OUTCOME: Plain packaging and point-of-sale display ban were not included in the directive, which came into force in May 2014.

A 2010 Philip Morris document shows the company drawing up plans to lobby Sweden in an effort to influence the European Commission’s new tobacco regulations for member states, known as the Tobacco Products Directive (TPD). Elements of the campaign:
1: Engage the justice ministry to “put pressure” on the health ministry so that the Swedish representative on the European Commission committee opposes plain packaging and “excessive” health warning labels, and supports lifting the ban on snus, a smokeless tobacco product.
2: Build a “broad coalition” of “third-party stakeholders,” such as the Stockholm Chamber of Commerce, and get them to pressure the government. (The chamber told Reuters that it does not lobby on behalf of individual companies.)
3: Establish a retailer network and contact bloggers and journalists to voice concerns about issues, including plain packaging and point-of-sale display bans.
OUTCOME: Plain packaging and point-of-sale display ban were not included in the directive, which came into force in May 2014.

In January 2013, Osaka Prefecture in Japan held a public consultation on a proposal to abolish existing smoking rooms, with a “roadmap towards total smoking prohibition in all public places,” according to a February 2014 Japan corporate affairs presentation. The Philip Morris document describes it as an “extreme proposal.” Elements of the campaign: 1: Ensure that “relevant stakeholders” oppose the move. Philip Morris field sales staff engaged retailers and others. 2: Engage local politicians and work with the industry in pushing back against the proposal. OUTCOME: The proposal was withdrawn.

In January 2013, Osaka Prefecture in Japan held a public consultation on a proposal to abolish existing smoking rooms, with a “roadmap towards total smoking prohibition in all public places,” according to a February 2014 Japan corporate affairs presentation. The Philip Morris document describes it as an “extreme proposal.” Elements of the campaign:
1: Ensure that “relevant stakeholders” oppose the move. Philip Morris field sales staff engaged retailers and others.
2: Engage local politicians and work with the industry in pushing back against the proposal.
OUTCOME: The proposal was withdrawn.

One of the company’s targets has been Vietnam.

The day the Moscow meeting ended, Koddermann received an email from his colleague Nguyen Thanh Ky, a leading corporate affairs executive for Vietnam. Ky said he had a “debrief lunch” with the Vietnamese delegation and had a good outcome to report: The delegation was in favor of “moderate and reasonable measures” to be implemented over a “practical timeline,” he wrote. He did not specify which measures they discussed.

The Vietnamese delegation spoke up often during the Moscow meeting. A review of notes compiled by tobacco-control groups accredited as observers showed Vietnam’s interjections frequently mirrored Philip Morris’ positions on tobacco-control regulations. Just like the tobacco giant, the Vietnamese said a higher tax on cigarettes would lead to more illicit sales. Like Philip Morris, they said the FCTC should stay out of trade disputes. And like Philip Morris, they opposed proposals to set uniform parameters for the legal liability of tobacco companies.

The FCTC guidelines on taxation did ultimately include a WHO recommendation for a minimum tax of 70 percent – something Philip Morris opposed. But the proposal to give the treaty more sway over trade disputes was weakened, and measures to strengthen the legal liability of cigarette companies were delayed.

Vietnam’s foreign ministry did not respond to questions from Reuters.

As soon as the conference ended, the documents show, Philip Morris turned to the next one: the 2016 meeting in India.

The 2014 PowerPoint presentation outlined the need to identify ways to gather intelligence during the Delhi conference. In a separate 2015 planning document, the company talks about the arrangement of farmer protests in the run-up to the meeting. Such protests did take place – including one in front of WHO offices in New Delhi. Reuters couldn’t determine whether Philip Morris was behind those demonstrations.

While other major tobacco companies also sent people to Delhi in November, Philip Morris was distinguished by its stealth. Executives from the company did not sign in with their tobacco industry colleagues at the FCTC convention center and stayed at a hotel about an hour’s drive away.

The anonymity and distance helped Philip Morris approach delegates covertly. On the second day of the conference, a white Toyota van pulled away from the front of the Hyatt Regency hotel – where Philip Morris had its operations room – and headed for the FCTC treaty venue. The van was carrying Ky, its corporate affairs executive from Vietnam.

OFFSITE MEETING: During the treaty conference on the outskirts of New Delhi last year, a Philip Morris representative met privately with a member of the Vietnamese delegation, Nguyen Vinh Quoc. In the first picture (left to right), Quoc can be seen emerging from a session at the treaty conference on Nov. 8. In the second picture, a van that left a Delhi hotel carrying a Philip Morris representative heads for the convention center. In the third picture, Quoc can be seen exiting the convention center moments before climbing into the van. REUTERS/Duff Wilson; Tom Lasseter

OFFSITE MEETING: During the treaty conference on the outskirts of New Delhi last year, a Philip Morris representative met privately with a member of the Vietnamese delegation, Nguyen Vinh Quoc. In the first picture (left to right), Quoc can be seen emerging from a session at the treaty conference on Nov. 8. In the second picture, a van that left a Delhi hotel carrying a Philip Morris representative heads for the convention center. In the third picture, Quoc can be seen exiting the convention center moments before climbing into the van. REUTERS/Duff Wilson; Tom Lasseter

Ky’s driver talked his way past police at the barricade outside the conference center, where FCTC-issued credentials were checked, explaining that he was driving “VIPs,” the driver later told Reuters.

A few minutes later, a man in a dark suit walked out of the conference center, passed the van and stopped at a street corner. The van did a U-turn, and a Reuters reporter saw the man in the suit quickly climb in. He was a senior member of Vietnam’s delegation to the FCTC conference: Nguyen Vinh Quoc, a Vietnamese government official.

The driver, Kishore Kumar, said in an interview that he dropped the two men off at a local hotel. Kumar said that on several other occasions that week, he took Ky to pick up people from the Hotel Formule1, a budget lodging where Vietnam’s delegation was staying during the conference.

Ky and Quoc did not respond to requests for comment.

Asked by Reuters about the interaction between Ky and the Vietnam representatives, Philip Morris executive Andrew Cave thumped on the table in a bar at the hotel where company representatives were staying. Reuters should focus, he said, on efforts by the industry to develop so-called reduced-risk products – those that deliver nicotine without the burning of tobacco and which the company says reduce harm.

When pressed about the meetings with Vietnam, Cave thumped the table again: “I’m angry that you’re focusing on that, rather than the real issues that matter to real people.”

In a subsequent email, Cave said: “Representatives from Philip Morris International met with delegates from Vietnam” during the Delhi conference “to discuss policy issues and this complied fully with PMI’s internal procedures and the laws and regulations of Vietnam.”

Delegates, Cave said in separate interviews, are reluctant to meet openly with Philip Morris because they are afraid of being “named and shamed” by anti-smoking groups.

Some delegates questioned the extent to which Philip Morris shaped the decisions made at the Moscow conference, saying attendees genuinely disagreed on certain issues. Nuntavarn Vichit-Vadakan, a Thai delegate, oversaw many discussions as the chair of an FCTC committee at the Moscow conference. She said delegates differed over the regulation of e-cigarettes, for instance, and any lobbying the company carried out would not have determined the outcome.

The Philip Morris documents leave questions unanswered. In some cases, the documents show the company hatching plans to change an anti-smoking regulation or to monitor activists, but don’t always make clear to what extent or how the plans were executed, if at all. The 2014 PowerPoint presentation called for “achieving scrutiny” of tobacco control advocates and said a “global project team” had been established for this purpose. It did not list what means would be used.

In some instances, Philip Morris’ lobbying plainly failed. In July 2015, the Ugandan parliament passed sweeping new anti-tobacco laws inspired by the treaty. All that was needed was President Yoweri Museveni’s signature, and the small African nation would become a leader on the continent in implementing a strict interpretation of the FCTC.

Philip Morris sent an executive, a younger white man, to tell the septuagenarian president, who long ago had helped topple dictator Idi Amin, why the tobacco act was a bad idea. Sheila Ndyanabangi, Uganda’s lead health official for tobacco issues who was present at the meeting, described the executive’s approach as lecturing the statesman.

“He said, ‘Ugandan tobacco will be too expensive’ and ‘it will not be competitive,’” Ndyanabangi said. Her account was confirmed by a senior Ugandan government official who was also present.

Museveni stared for a moment at the Philip Morris executive and a representative from a major tobacco buyer who’d come with him. The president then declared: “Slavery ended a long time ago.” There was a long silence in the room, recalled Ndyanabangi. Museveni said Uganda didn’t need tobacco, and the meeting was over. The president signed the bill that September.

Museveni’s office did not respond to requests for comment.

Over time, however, the industry’s lobbying has slowed the treaty’s progress. At the biennial conferences, the discussions have changed. In Moscow, for instance, there was a strong focus on trade and taxes. “You could see from the floor that interventions were very, very, very much focusing on the trade aspects, many times even putting trade over health,” the FCTC’s da Costa e Silva said in an interview last year.

The composition of FCTC delegations sent by governments has changed to include more members who aren’t involved in health policy. That’s in line with what Philip Morris and other tobacco companies want: Philip Morris, as well as British American Tobacco, has sought to move the balance of the membership away from public health officials and toward ministries like finance and trade. Such agencies, said the former Philip Morris executive, benefit from tobacco tax revenues and attach less weight to health concerns.

“The health department would just want tobacco to be banned, while for the finance ministry it’s more like how can we leverage or get as much money as we can,” he said.

The object of Philip Morris’ efforts, according to the 2014 PowerPoint on corporate affairs, is to “move tobacco issues away” from health ministries and demonstrate there are broader public interests at play – that “it’s not about tobacco.”

Cave, the Philip Morris corporate affairs executive, confirmed the company tries to persuade governments to change the composition of delegations. Health officials, he said, aren’t equipped to handle the intricacies of issues such as taxation.

“You’re looking at illicit trade, you’re looking at tax regimes, you’re looking at international law,” he said. “Now each of these areas, it’s logical, if you want to really tackle the trade and tobacco smuggling, illicit trade, who would you go to? You wouldn’t go to the health ministry.”

TOBACCO FARMERS: A worker tends to a tobacco crop in the farming community of Beatrice, Zimbabwe. At the treaty meeting in Moscow in 2014, a proposal calling for countries to limit support for tobacco growers was weakened. “This is a very positive result,” wrote Chris Koddermann, a Philip Morris executive, in an email. REUTERS/Philimon Bulawayo

TOBACCO FARMERS: A worker tends to a tobacco crop in the farming community of Beatrice, Zimbabwe. At the treaty meeting in Moscow in 2014, a proposal calling for countries to limit support for tobacco growers was weakened. “This is a very positive result,” wrote Chris Koddermann, a Philip Morris executive, in an email. REUTERS/Philimon Bulawayo

“I’m angry that you’re focusing on that, rather than the real issues that matter to real people.”

Philip Morris executive Andrew Cave, when asked about the company’s interaction with FCTC delegates

Reuters analyzed the rosters of the almost 3,500 accredited delegation members who have attended the seven FCTC conferences since 2006. The analysis found that there were more than six health delegates for every finance-related delegate in 2006. In Delhi last year, that ratio had fallen to just over three health delegates for every finance delegate. The number of delegates from finance, agriculture and trade fields has risen from a few dozen in 2006 to more than 100 in recent years.

Vietnam’s delegation, for example, has changed markedly. At the first FCTC conference in 2006, none of its four delegates were from finance or trade ministries. By 2014, in Moscow, there were 13 delegates, with at least four from finance-related ministries, including the chief delegate. Vietnam’s foreign ministry did not respond to questions about the delegation.

Da Costa e Silva isn’t opposed to having delegates from trade ministries, but she says their primary focus needs to be on health. And she was concerned by the makeup of the Vietnamese delegation. In a letter to the Vietnamese prime minister in late 2015, she asked that tobacco industry employees be excluded from the delegation. If they weren’t, she wrote, Vietnam might be “unable to play a full part in discussions.”

In 2016, Vietnam brought 11 delegates to the conference, of whom six were from health agencies, including the chief representative.

Some tobacco-control activists who attended the Delhi meeting in November say it was the worst so far in terms of passing new anti-smoking provisions.

Matthew Myers, who heads the Campaign for Tobacco-Free Kids, said multiple countries came prepared to consciously block action. He said he heard delegates making arguments “I haven’t heard in 25 years.”

A Nigerian delegate, for instance, asked to remove a reference to “the tobacco epidemic” from a draft proposal on liability for tobacco-related harm, according to notes taken by anti-smoking groups.

Asked for comment, Christiana Ukoli, head of the delegation in Delhi, said the “Nigerian delegation strongly dissociates itself from [that] statement.”

The Delhi conference ended as it began, with treaty Secretariat officials not knowing where Philip Morris had been or what it had done. The company had flown in a team of executives, used a squad of identical vans to ferry officials in New Delhi, and then left town without a trace.

Watering down

Just days after the FCTC conference in Moscow ended in October 2014, Philip Morris executive Gustavo Bosio sent an email to colleagues highlighting what he said was the company’s success in pushing back on three treaty proposals related to trade issues. “These excellent results are a direct consequence of the remarkable efforts of all PMI regions and markets during the past two years and throughout the intense week in Moscow,” wrote Bosio, then manager for international trade. The first two columns in each tab below show the initial proposal and the final outcome, and are from an analysis Bosio attached to his email. The third column contains extracts from his email explaining what happened in each case.

fctc1

fctc2

fctc3

 

Source: Internal Philip Morris documents; emphasis added by Philip Morris. Note: “AMRO” refers to the Americas regional office of the World Health Organization.

Additional reporting by Joe Brock in Johannesburg, Ami Miyazaki in Tokyo, Mai Nguyen, My Pham and Minh B. Ho in Hanoi, Elias Biryabarema in Kampala, Enrico Dela Cruz in Manila, Stephen Eisenhammer and Anthony Boadle in Brasilia, Alexis Akwagyiram and Ulf Laessing in Lagos, and Patturaja Murugaboopathy in Bengaluru.

The Philip Morris Files
By Aditya Kalra, Paritosh Bansal, Duff Wilson and Tom Lasseter
Graphics: Jin Wu
Design: Troy Dunkley
Photo editing: Tom White and Altaf Bhat
Edited by Peter Hirschberg

How big tobacco has survived death and taxes

The world’s five major tobacco companies are thriving, profitable and increasing sales, despite many predictions of the industry’s decline

https://www.theguardian.com/world/2017/jul/11/how-big-tobacco-has-survived-death-and-taxes

A casual observer could be forgiven for believing that the tobacco industry – for so long a fixture as permanent as its two main by-products, death and taxes – is itself on its last legs.

In the US, health officials have predicted that smoking rates in America could drop to as low as 5% by 2050, well within the lifetime of someone born today.

Last year, shareholders of UK-based Imperial Tobacco approved a decision to change the company’s century-old name to Imperial Brands, hinting at a move away from traditional cigarettes.

Even globe-straddling colossus Philip Morris International (PMI), owner of brands including Marlboro, has set its stall out for a “smoke-free” future, where nicotine addicts get their fix from vaping and other non-tobacco products.

Yet, for all of these predictions, one thing has remained unchanged: Big Tobacco is thriving, profitable and increasing its sales.

Excluding China, where the market is monopolised by the state, five major companies dominate the global tobacco trade – Philip Morris International (PMI), British American Tobacco, Japan Tobacco, Imperial Brands and Altria (the former US assets of PMI).

Between them in 2016, they shipped 2.27tn cigarettes, more than 300 for every man, woman and child on the planet, racking up combined sales of $150bn (£115bn). Their combined profits reached $35bn (£27bn), allowing investors in those companies to receive dividends of $19bn (£14.5bn).

Of these giants, one of the most powerful is British American Tobacco (BAT), the London-based firm that can trace its history back to 1902.

Run from Globe House, its headquarters next to the Thames river, BAT sells its brands in 200 countries and is market leader in 55 of them.

Far from looking to a future beyond tobacco, BAT is doing perfectly well as it stands.

At its annual meeting in March, chairman Richard Burrows toasted a “vintage year”, as profits rose to £5.2bn ($6.7bn) allowing the company’s shareholders to take a dividend worth an additional 10%.

The rewards were so great because BAT’s sales show no signs of the industry’s much-vaunted decline. The company sold 665bn cigarettes in 2016, nearly 100 for every human on earth and 2bn more than it sold the year before.

Cigarette sales among its so-called Global Drive Brands – Dunhill, Kent, Lucky Strike, Pall Mall and Rothmans – jumped 7% to 346bn.

In the section of its accounts that details non-cigarette sales, which the company terms “next generation products”, there is nothing to see.

The numbers are so small that they are considered immaterial to its financial results and do not need to be disclosed under stock market rules.

Yet the company’s traditional business continues to generate big headlines and bigger numbers. By the end of the year, BAT is likely to have completed a landmark $49bn deal to buy the 57.8% of US tobacco giant Reynolds American that it does not already own. A simultaneous shareholder vote next Wednesday by both firms is expected to agree the deal at Reynolds HQ in Winston-Salem, North Carolina, and BAT in London.

If US tobacco sales really are set to fall off a cliff, that would be a monumental strategic misstep.

But while the percentage of Americans who smoke is on the wane, the US remains a market with huge potential.

That’s because the population is rising, meaning that even as smoking rates decline in percentage terms, the actual number of smokers is relatively static at about 45 million people.

US cigarettes are also relatively cheap compared with prices in the UK, leaving some scope for the company to raise prices without losing customers.

Reynolds and BAT will also look to the future by pooling research on smokeless products, hoping to capture that growing market, though that won’t be the big money-spinner any time soon.

And then there is the developing world, where the rate at which governments and public opinion are turning against tobacco differ dramatically from wealthier economies.

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A ‘defensive’ stock

BAT increased its revenues in every region bar Asia-Pacific last year, with the developing world doing more than its share of the heavy lifting.

Among the “key markets” listed in its annual report are Indonesia and Egypt – and for good reason.

The World Health Organisation projects smoking rates in Indonesia to increase by 2025, with the number of smokers growing from 73m to 97m based on current trends.

Egypt is another key market where smoking rates are projected to grow, with up to 21m Egyptians forecast to be smokers by 2025, compared to 14m in 2015.

One only has to look at BAT’s roster of investors for evidence of the confidence that well-informed institutions with deep pockets have in the future of cigarettes, even if that future is less bright in the West.

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It’s a list that features nearly every major investment company in the world, testament to the safe bet that tobacco giants such as BAT offer to investors.

Top of the share register is BlackRock, the all-powerful asset manager that has a stake in nearly every major listed company in the world, managing investors’ funds of approximately $5.4tn, more than the economy of Japan.

Some way further down the list is Woodford Investment Management, run by Neil Woodford, a figure held in awe in London for his uncanny ability to make money.

He famously invests a huge chunk of his portfolio in tobacco, explaining that he is not paid to make moral judgments but to make money for clients.

Tobacco is attractive to investors – including councils in the UK – because it is seen as a “defensive” stock, in other words a good place to invest money that you are not prepared to lose.

The shares rarely decline in value even when times are tough and also deliver a steady income from annual dividends.

The huge rewards on offer for investors mean that those who manage the great behemoths of tobacco are also handsomely rewarded.

BAT chief executive Nicandro Durante is no exception. He was handed a package of cash and shares worth $10m (£7.6m) last year, taking his earnings over six years to a cool $44m (£34m).

When fellow directors are included, the 14-strong BAT boardroom enjoyed a combined $18m (£14m) payday in 2016.

There are other perks. Durante gets free tax advice from the company, a personal driver and security for his homes, in London and Brazil.

Both executives and non-executives also have access to a walk-in GP clinic near BAT’s headquarters at Globe House in London, enjoying the benefits of a National Health Service that has been estimated to spend up to $6.5bn (£5bn) a year on smoking-related illnesses.

BAT’s board earn their corn as much for their network of connections as they do for their hard work.

Burrows is a former governor of Bank of Ireland, while senior independent director Kieran Poynter is a managing partner of Big Four accountancy PricewaterhouseCoopers and previously advised the UK’s Treasury.

Its non-executive directors boast a string of similar appointments at multinational companies. Savio Kwan, for instance, was chief operating officer of China’s largest internet business, Alibaba.

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Ann Godbehere ran the finances of Northern Rock after its bailout and also serves on the boards of mining giant Rio Tinto, Swiss bank UBS and insurer Prudential.

Nor does the company’s network of influence end there.

While it does not donate money directly to British political parties, it does funnel cash to influential right-leaning thinktank the Institute of Economic Affairs.

BAT gives the IEA around $52,000 (£40,000) a year, a sum equivalent to about 5% what the organisation pays its staff, some of whom appear frequently in the media to criticise tobacco control legislation such as plain packaging.

Chief among those staff is director-general Mark Littlewood, a former press spokesman for the Liberal Democrats and one-time adviser to David Cameron.

Littlewood has been a vocal critic of tobacco control legislation such as the ban on smoking in pubs, as well as plain packaging.

The IEA has also received funding from Philip Morris International and Japan Tobacco International.

The BAT bosses

Nicandro Durante – chief executive

Nicandro Durante joined Brazilian subsidiary Souza Cruz in 1981, and rose through the ranks over three decades until he was appointed chief executive in 2011.

He had impressed the company’s senior management during a two-year stint as regional director for Africa and the Middle East, key areas of future growth for tobacco companies facing up to declining smoking rates in more developed economies.

Born to Italian parents in 1956 in Sao Paulo, he played football for the city’s Corinthians team in his teens before going into business.

Married with two children, Durante stopped smoking cigarettes in favour of cigars, but has no qualms about tobacco, which he described as a “very ethical” industry in a 2012 interview with the Financial Times.

In 2015, he fielded allegations from a former employee in Kenya that BAT bribed officials for various purposes, including the undermining of tobacco control laws.

BAT denies any wrongdoing. A spokesperson said: “We will not tolerate improper conduct in our business anywhere in the world and take any allegations of misconduct extremely seriously. We are investigating, through external legal advisors, allegations of misconduct and are liaising with the Serious Fraud Office and other relevant authorities.”

In 2016, Durante was handed a package of cash and shares worth $10m (£7.6m), taking his earnings over the past six years to a cool ($44m) £34m.

Richard Burrows – chairman

Addressing BAT’s shareholders earlier in 2017, Burrows toasted a “vintage year”, in which the company shrugged off bribery allegations in late 2015 to record rising profits.

Some investors were less keen on Burrows when he was named chairman in 2009.

Burrows had resigned as governor of Bank of Ireland, leaving the lender in dire straits, with big losses and mounting debt threatening its very survival.

Tens of thousands of the bank’s mortgage customers were plunged into negative equity and the lender eventually needed a state bailout that enraged many Irish people.

As the bosses of rival lenders faced public opprobrium for their stewardship of the country’s banking sector, Burrows got out just in time, landing the chairmanship of BAT in 2010.

But BAT wasn’t concerned by his record in banking, looking instead to his 22 years with Irish Distillers, during which time he was credited with turning Jameson whiskey into an internationally-recognised brand.

The Dubliner, 71, is a non-smoker who is married with four children and enjoys sailing and rugby.

He is also chairman of investment company Craven House Capital, whose assets includes beachfront land in Brazil. He is a non-executive director of Rentokil and Carlsberg.

Kieran Poynter – senior independent director

After a near 40-year career with global accounting giant PwC, which put him among the ranks of the UK’s best-paid accountants, Kieran Poynter joined BAT’s board as senior independent director.

He brought with him valuable connections, having served as an adviser to former UK chancellor of the exchequer Alistair Darling.

Poynter, a Chelsea FC season ticket holder, is a former director of the salubrious Royal Automobile Club, the gentleman’s club on London’s Pall Mall.

He also sits on the board of F&C Asset Management and IAG, the parent company of British Airways.

Ben Stevens – finance director

Ben Stevens looks after BAT’s money, and has spoken about how the company is growing market share and looking for acquisitions in Asia and North Africa.

Part of his role is trying to convince governments not to raise excise duty on cigarettes too quickly, according to an interview he gave with financialdirector.co.uk.

In the same interview, he referred to the need to have a “thick skin” because of the number of people “bashing tobacco companies”.

Stevens gave up smoking nearly 30 years ago, two years before joining the company. But said in 2013 that profits would come from “combustible tobacco” for the near future.

Philip Morris to pay millions to Australia on failed plain packaging case

Big tobacco battle: Final costs figure kept secret but reported as being up to €33.36m

https://www.irishtimes.com/news/world/asia-pacific/philip-morris-to-pay-millions-to-australia-on-failed-plain-packaging-case-1.3149956

Tobacco manufacturer Philip Morris will be forced to pay millions of dollars in legal fees to Australia after its failed case against plain packaging laws.

Big tobacco companies have fought vigorously against the Australian government’s plain packaging laws since they were introduced in 2011.

By banning logos and distinctive-coloured cigarette packaging, Australia’s laws went further than the advertising bans and graphic health warnings introduced in many other countries.

Philip Morris, Imperial Tobacco and Japan Tobacco quickly attempted to have the laws overturned through a constitutional challenge in the high court, which they lost in 2012.

Philip Morris Asia then took a case to the permanent court of arbitration in 2012. It tried to use the conditions of a 1993 trade agreement between Australia and Hong Kong to argue a ban on trademarks breached foreign investment provisions.

Corporate giant

The corporate giant not only lost but was criticised by the court, which found the case to be “an abuse of rights”.

The court published a decision on the payment of costs at the weekend, which it made in March. The decision, which brought five years of proceedings to a close, found Philip Morris Asia liable to pay Australia’s multimillion-dollar claim for legal costs.

The final costs figure was kept secret but Fairfax Media reported it as being up to AUS $50 million (€33.36 million).

Australia successfully argued Philip Morris must pay its court fees and expenses, the cost of expert witnesses, travel, and solicitors and counsel. It also claimed interest.

Australia had told the court its claim was modest and was a small proportion of what the tobacco giant had sought in damages.

Critical importance

It said Philip Morris had sought to challenge a public health measure of critical importance to Australia, making it important to “mount a robust and comprehensive response to all aspects of the claim”.

Philip Morris had tried to argue the government’s costs were unreasonable for a “legal team that consisted primarily of public servants”.

The company argued that two similar countries, Canada and the US, had never claimed more than US$4.5m and US$3m respectively in costs and fees. Australia’s claim was much more than that.

“The claimant emphasises that, even excluding the fees of four outside counsel, the respondent’s government lawyers claim over [REDACTED]in fees, even though Australia itself pays them ‘very modest government salaries’,” the court’s decision read.

But the court found Australia’s claim was reasonable, rejecting Philip Morris’s arguments.

“Taking into account the complexity of issues of domestic and international law relevant in this procedure, particularly for a government team usually not engaged in such disputes, the Tribunal does not consider that any of these costs claimed by the Respondent were unreasonable and should not have been incurred,” it found.

“In making this assessment, the Tribunal also takes into consideration the significant stakes involved in this dispute in respect of Australia’s economic, legal and political framework, and in particular the relevance of the outcome in respect of Australia’s policies in matters of public health.”

Earlier this year big tobacco failed in a separate bid to have the laws overturned by the World Trade Organisation. The decision was widely seen as a green light for more countries to follow Australia’s lead.

Philip Morris ‘tobacco sticks’ court prosecution postponed

The heat has come on tobacco company Philip Morris for importing and selling “tobacco sticks”.

http://www.stuff.co.nz/business/industries/93268568/Philip-Morris-tobacco-sticks-court-prosecution-postponed

The company is facing two charges brought by the Ministry of Health over the sticks, called Heets.

The charges were to be called in the Wellington District Court on Friday but at the last minute they were adjourned by agreement until September 7.

That date was for a case review hearing, an indication that the company would plead not guilty although it appeared no pleas were entered.

The ministry said it considered Heets fell into a category of tobacco products for oral use, other than smoking, and so were banned under the Smoke-Free Environments Act.

Heets were described as tobacco sticks heated in an electronic device, rather than being burned like a normal cigarette.

Through a code-protected invitation-only website, the company was marketing its IQOS smokeless electronic devices, which heated the sticks to release the nicotine.

In March the company said it was confident the way it was doing business was legal.

General manager for Philip Morris New Zealand, Jason Erickson, said they complied with all sections of the Smoke-Free Environments Act.

“We are currently making our IQOS device and Heets available to registered adult smokers on a website. If requested, we will provide a demonstration on how to use the IQOS device, which as the Ministry of Health has acknowledged, is a consumer electronics product.”

The two charges the company faced had a maximum $10,000 penalty.

Stopping production and marketing of tobacco can be the only way to uphold basic human rights

Action on Smoking and Health and Unfairtobacco agree with the Danish Institute of Human Rights (DIHR) that Philip Morris International (PMI) should cease “the production and marketing of tobacco.”

http://www.news-medical.net/news/20170529/Stopping-production-and-marketing-of-tobacco-can-be-the-only-way-to-uphold-basic-human-rights.aspx

After completing a collaboration with Philip Morris International (PMI) to develop a “human rights implementation plan,” the Danish Institute for Human Rights (DIHR) concluded that immediately stopping the sale and marketing of tobacco is the only way for tobacco companies to uphold basic human rights.

ASH and Unfairtobacco are fully aligned with the DIHR conclusion that tobacco production and marketing is deeply harmful and irreconcilable with the human right to health, meaning that PMI and other tobacco companies must stop selling harmful products immediately.

Tobacco giant Philip Morris International (PMI) approached the Danish Institute for Human Rights (DIHR), a quasistate body, last year to collaborate on a “human rights implementation plan” for PMI. The DIHR was given access to the corporation to assess PMI’s value chain. Following DIHR’s completion of their work, they concluded:

Tobacco is deeply harmful to human health, and there can be no doubt that the production and marketing of tobacco is irreconcilable with the human right to health. For the tobacco industry, the [United Nations Guiding Principles on Business and Human Rights] therefore require the cessation of the production and marketing of tobacco.

Allan Lerberg Jørgensen, Department Director, Human Rights and Development with the DIHR, stated they hoped their “input will enable PMI to better understand how the corporate responsibility to respect human rights applies to their business and take the necessary action.”

“ASH and our allies strongly agree with DIHR that the sale of cigarettes is irreconcilable with human rights. The necessary action that DIHR references is clear: if PMI is serious about human rights, it should stop producing, marketing and selling products that kill their consumers.”

Laurent Huber, Action on Smoking and Health (USA)

“As early as 1954, then PMI Vice President George Weissman said that ‘If we had any thought or knowledge that in any way we were selling a product harmful to consumers, we would stop business tomorrow’. The DIHR assessment is just the most recent reminder of their promise. We expect PMI to finally stop selling cigarettes immediately.”

Laura Graen, Unfairtobacco

For PMI to continue producing and marketing cigarettes directly conflicts with development and human rights objectives. Tobacco corporations not only sell a defective product that kills half of its consumers, but they also have a long history of pressuring governments to block and delay lifesaving regulations, thus costing the world millions of lives and billions of dollars every year.

Global Public Health Policies Against Tobacco Partnerships

One strategy the tobacco industry utilizes is the use of third party collaborations to interfere with tobacco control policy making, or to gain legitimacy as a “stakeholder,” and to white wash their reputation.

For this reason, the global tobacco treaty, the World Health Organization Framework Convention on Tobacco Control (WHO FCTC) includes a process designed to protect public health policies from the interests of the tobacco industry, requiring that all public or semipublic institutions “should interact with the tobacco industry only when and to the extent strictly necessary to enable them to effectively regulate the tobacco industry and tobacco products.” With that in mind, the global public health community was united in asking DIHR to break their PMI relationship, in line with the Institute’s international human rights obligations. The DIHR responded promptly, ending the relationship before its originally published end date (August 2017).

Stopping the sale of tobacco products is also consistent with the United Nations

Sustainable Development Goals (SDGs), which call on countries to reduce the number of smokers through implementation of the tobacco treaty, the WHO FCTC.

Philip Morris has publicly welcomed the adoption of the Sustainable Development Goals, while their products are simultaneously recognized by the United Nations, Human Rights agencies, and the public health community as a barrier to development and human rights. Philip Morris states on its website, “How long will the world’s leading cigarette company be in the cigarette business?” The answer is clear: not a day longer.

Big Tobacco is losing the fight to stop plain packaging of cigarettes

Dr Enrico Bonadio, a Senior Lecturer in the City Law School, says the tobacco industry’s bid to avoid plain packaging by relying on legal arguments around trade and intellectual property rights, is being systematically dismissed by courts around the world.

https://www.city.ac.uk/news/2017/may/big-tobacco-is-losing-the-fight-to-stop-plain-packaging-of-cigarettes

You may already have seen the tobacco packs currently sold in the UK: a dark, murky green colour with large graphic health-warning images and scary messages aimed at informing current and potential smokers about the devastating consequences of tobacco consumption. They have no colourful logos, with the brand name just displayed in small characters in a standard font.

These packs are now required by new regulations which entered into force in May 2016. There has been a one-year transitional period for the sell-through of old stock – and from May 20 2017 all tobacco products on sale in the UK must comply with the new rules.

The legislative move has been recommended to all countries by the World Health Organisation to reduce the attractiveness of smoking and eventually reduce consumption. Australia was the first country to introduce such strict packaging requirements in December 2012. France and, of course, the UK have since followed suit.

It follows significant research that shows these new standardised cigarette packs are much less appealing to consumers – and young people especially.
The industry’s legal defeats

No wonder tobacco companies have challenged the measure in the courts. They have argued that it is useless, too harsh – and is an infringement of their fundamental and intellectual property rights, especially trademarks. Yet, their claims are based on weak arguments and have been rejected by both the High Court of England and Wales and the Court of Appeal.

The tobacco industry has faced numerous courtroom defeats of late. Last year Uruguay won a landmark case against the Swiss giant Philip Morris International. The company had sued the Latin American state after it introduced two measures affecting tobacco packaging and trademarks. These were mandatory graphic health warnings covering 80% of cigarette packets (a measure very close to plain packaging) and the obligation for tobacco companies to adopt a single presentation for their brands, dropping for example the “gold” and “blue” descriptors, that could lead smokers to believe one variant was safer than another.

The fact that the courts sided with Uruguay would have been encouraging to other countries aiming to introduce controls on tobacco packaging. And even greater encouragement came recently from a World Trade Organisation ruling which deemed that the plain packaging requirements introduced by Australia as compliant with international trade and intellectual property rules – and are therefore a legitimate public health measure.

The decision has not been officially announced, but a confidential draft of the interim ruling was leaked to the media and the final decision is expected later this year. The Australian measure had been challenged at the WTO tribunal by Cuba, Dominican Republic, Indonesia and Honduras, countries whose economies strongly rely on the tobacco industry.

A domino effect

This is a blow to the industry. The short-term consequences of the WTO ruling – Imperial Tobacco’s shares fell more than 2% after the decision was leaked – reflects the longer-term danger that this ruling poses. It will likely convince other states to introduce plain packaging legislation without fear of violating international trade and intellectual property laws. It basically gives them a green light by removing the regulatory chilling effect that such legal action has produced on countries that wanted to follow Australia’s example.

After all, more and more countries seem interested in adopting standardised packaging. As well as France and the UK, Ireland and Norway will introduce packaging restrictions later in 2017, and Hungary in 2018. Many other states are debating similar measures, including New Zealand, Canada, Belgium, Slovenia, Belgium, Singapore and Thailand.

So, a legislative trend has started which aims to restrict the ability of tobacco manufacturers to make their products appealing to consumers by using eye-catching words, logos or ornamental features on the pack. And attempts by Big Tobacco to stop it by relying on legal arguments around trade and intellectual property rights are being systematically dismissed by courts around the world.

Ultimately, the industry needs to accept the fact that its ability to use fancy brands, especially on packaging, may be reduced by governments for public health reasons. Also that a company’s property rights are not absolute or untouchable. Not only does it not have enough legal basis – as has now been confirmed by several courts and tribunals – but it also disregards legitimate policies adopted by democratically elected governments.

Heat-Not-Burn Tobacco Cigarettes: Smoke by Any Other Name

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