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Altria/Philip Morris Break-Up

Altria/Philip Morris Break-Up Threatens to Worsen the Global Tobacco Pandemic

“The breakup of Philip Morris will unleash a Philip Morris International that will be even more predatory in pushing its toxic products worldwide,” says Robert Weissman, director of Essential Action, a corporate accountability group based in Washington, D.C. “An independent Philip Morris International, which is likely to be based in Switzerland, will no longer feel constrained by public opinion in its home country and most important market, the United States.”

Altria/Philip Morris is the world’s biggest multinational tobacco corporation. Eighty percent of its sales are outside of the United States.

The company announced last August its intention to pursue the spin-off. Today, Altria’s Board of Directors is expected to finalize the decision and announce the planned timing of the spin-off.

Essential Action has spearheaded an effort by more than 150 public health organizations in over 70 countries worldwide to respond to the Philip Morris break-up. The groups have urged governments ( to adopt comprehensive tobacco control measures to ensure that the spin-off of Philip Morris International does not worsen the tobacco epidemic. Among other measures, they are urging that governments ratify and strongly implement the Framework Convention on Tobacco Control, ban the tobacco industry from lobbying or working on legislation to implement the global treaty, and exclude tobacco products from bilateral and multilateral trade and investment agreements. Public health groups have also called on Philip Morris to commit to public health principles — a set of principles the company has rejected.

“An independent Philip Morris International based outside of the United States will be immune to even the possibility of domestic regulation in the United States or litigation in U.S. courts,” says Anna White of Essential Action, “This has been a real threat to Philip Morris International.”

The litigation risk to Philip Morris International was recently made apparent in the U.S. government case against the tobacco industry. In that case, U.S. Judge Gladys Kessler ruled that Philip Morris and other tobacco companies must stop using misleading terms like “light,” “mild” and “low” (as in “Marlboro Lights”). The tobacco industry has used these terms to deceive smokers into thinking they are using a reduced risk product, when they are not. Judge Kessler ruled that the prohibition on use of these misleading terms extends to Philip Morris International. If an independent PMI had no connection to the United States, the judge would not have been able to issue this order.

The Wall Street Journal reported on January 29 on Philip Morris International’s plans to inflict on the world an array of new products, packages and marketing efforts. According to the Journal, these are designed to undermine smokefree workplace rules, defeat tobacco taxes, segment markets with specially flavored products, offer sweetened cigarettes sure to appeal to youth, and overcome marketing restrictions.

“The World Health Organization projects that 10 million people will die annually from tobacco-related disease by 2030, 70 percent in developing countries,” says White. “We must work to lessen this toll, not allow an independent Philip Morris to make it worse.”

Weissman notes that there is also a danger of the independent Philip Morris International selling its new products into the United States — perhaps immune from the modest marketing restrictions now imposed on the major tobacco companies as a result of past litigation.

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