Tobacco Giant Leads in Profits, Addicting Youth

First Shareholder Meeting Since Split Draws Global Protest

For Immediate Release:  May 5, 2009
Contact:  Sara Joseph, 617-447-2527

NEW YORK – With global tobacco deaths climbing above 5.4 million a year, Philip Morris International (PMI) is heralding a 12.7 percent net revenue growth in 2008. Not coincidentally the regions most impacted by the tobacco epidemic are the same “emerging markets” that the corporation credits with driving its growth.

But at the end of PMI’s 2008 surge, the international community moved to put a damper on the abuses fueling the corporation’s growth – aggressive promotion of addictive and deadly products to children, interference in health policy, and so-called “corporate social responsibility.” As part of implementation of the global tobacco treaty, 164 countries adopted landmark guidelines to overcome Big Tobacco’s abuses.

“Philip Morris has a long history of interfering in public health policies like the global tobacco treaty,” said Kathy Mulvey, International Policy Director for Corporate Accountability International. “But the treaty itself slams the door on such interference, and now that explicit safeguards are spelled out to help countries resist industry tactics, the question remains, ‘will Philip Morris finally butt out of public health policy?’”

Corporate Accountability International and its allies used the annual shareholder meeting to challenge PMI to improve on its track record and stop blocking the implementation of the treaty’s new guidelines. Protestors marched outside the meeting at the Grand Hyatt to PMI’s office at 120 Park Avenue, while Mulvey confronted corporate executives with evidence of its ongoing abuses and a photo petition from 500 people in 65 countries. Similar marches, press conferences, letter campaigns and other activities were also scheduled to take place in more than 20 countries.

“"A growing movement of youth advocates worldwide is resisting this corporation's aggressive targeting of their generation," said Anna White of the Global Youth Action on Tobacco Network  "They see through the cynical lies and manipulation it is using to lure and addict their peers and are taking action for a future where governments protect people, not corporate profits."

In 2008, PMI attempted to use free trade agreements to block the treaty’s implementation in Central America, attempted to draft tobacco control policy in the Pacific Islands, and spent over $24 million across the globe on so-called “corporate social responsibility” or CSR.

PMI and other tobacco giants have long used CSR, including so-called youth smoking prevention campaigns, to improve their public images and disguise their business model built on addicting youth. CSR has also served to reinforce brand name-recognition among target audiences and even to make its products more attractive to children.

In Colombia just 10 days ago, the President of PMI subsidiary Coltabaco touted the corporation’s self-regulation and alleged support for restrictions on marketing to youth in arguing against “extremes” in a proposed tobacco control bill. In fact, the amendments in question would strengthen Colombia’s compliance with the global tobacco treaty.

For this reason, new treaty guidelines recognize CSR as a form of tobacco advertising, promotion and sponsorship – which is banned under the treaty -- and recommend that governments “denormalize” these activities.

And while the international community continues to advance the global tobacco treaty as a means to head off PMI’s global abuses, the U.S. continues to remain on the sidelines. The Bush Administration signed the treaty in May 2004 but never submitted it to the Senate for ratification. As a Senator, Barack Obama urged then-President Bush to submit the treaty to the Senate. President Obama now has the opportunity to see this through.

In March 2008, PMI split from U.S.-based tobacco giant Altria (Philip Morris USA), in part to protect itself from U.S. regulation and litigation. However, PMI continues to lobby on U.S. tobacco legislation, and is publicly traded on the New York Stock Exchange. U.S. ratification of the tobacco treaty would help force the world’s largest and most profitable tobacco corporation to conform to lifesaving global standards.

“Although PMI has attempted to shield itself from regulation and accountability by the U.S. government, the corporation is not free from accountability to its shareholders,” said Mulvey. “Today shareholders are telling this corporation to stop profiting at our children’s expense.”

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