Isabelle Sinic :
© December 2002
Philip Morris, Incorporated
Introduction
The specificity of tobacco
industries among other corporations derives from the nature of the product
sold. Their capacity to grow and develop by selling a product hazardous
for health and even lethal in many cases makes them stand side by side
with the alcohol industries. How is this possible and above all to such
a global extent ?
Philip Morris is a leader in this
double-dealing. Moving along this paradoxical issue - in short why and
how do people keep being taken in by the tobacco industry ? - my point
will be to focus precisely upon the shift constantly operated by tobacco
corporations, intending to turn negative considerations (health related
issues and costly addiction) into positive aspects (freedom of the consumer
and democratic workplace for the happy few of the Philip Morris family),
or if not possible, to counterbalance and hide them.
Several figures may help illustrate
my point :
Philip Morris manufactures more
than 160 cigarette brands in some 170 countries.
Philip Morris' most important spending
is dedicated to the promotion of its name ; it reached $142 million in
1999.
Considering these figures, I will
record briefly some elements of the history of Philip Morris, then examine
the devices used to ensure maximum control over both consumers and policies,
and finally focus upon the view of anti-tobacco activists who attempt at
recovering citizens' power over corporations.
I- From local company to transnational
corporation : seizing opportunities
Two sources are available : the
Philip Morris website (<www.philipmorris.com>) and R. Barnett and J.
Cavanagh's book, Global Dreams in which a whole chapter is dedicated to
what they call "The Malboro country".
1) Historical landmarks
The story of the company dates
back to 1847, when Philip Morris set up a tobacconist shop in London. He
then began making his own cigarettes. In 1902, a subsidiary was set up
in New York. By royal warrant, Philip Morris was appointed "Tobacconist
to His Majesty King Edward VII". Yet, nothing at first predicted a global
expansion. The market was largely dominated by the American Tobacco Company
and the Imperial Tobacco Company (a British trust).
In 1919, American investors bought
out the company. They concentrated on exports to the orient and developed
a new market : women smokers . By targetting those markets, Philip Morris
intented to gain ground where other companies were not yet prominent.
But the 1929 depression proved to
be Philip Morris' oppotunity. By practising discount prices in an already
crumbling market, Philip Morris emerged. The brand was promoted all over
the country by Johnny Roventini, a former bellhop who became Philip Morris'
pitchman : his cry -'Call for Philip Morris'- invaded the radio and his
picture was plastered on billboards all across the country.
Thus, Philip Morris had managed
to take advantage of the situation and not even World War II made his pace
flag.
These landmarks present the first
steps of the making of the company. It has to be noticed is that Philip
Morris' strength lies in the capacity of its executives to take advantage
of any weakness and make it a new opportunity.
2) Malboro Man : the making
of a mythical brand.
As already underlined, the
female market appeared as offering new possibilities of expansion and we
can go as far as saying that this market was as much latent as it was created
by the tobacco industry, through customised advertising campaigns.
In the case of Philip Morris, the
opportunity was seized as early as the 1920s and Malboros were first designed
to women. The slogan read : "Women quickly develop discerning taste, that
is why Malboros now ride in so many limousines, attend so many bridge parties,
and repose in so many handbags ." The introduction of filter-tips made
this market flag as women found that it smeared too easily with lipstick.
When the Malboro brand reappered
a few years later, its advertisers took the opposite view of the relative
failure with women. As men still prefered cigars and pipes to cigarettes,
which seemed to somewhat undermine their virility, the most masculine image
had to be found to have a chance to gain ground in this momentous market.
By 1954, Joseph Cullman, member of a prominent American tobacco growing
familiy, was put in charge of marketing. The advertiser Leo Burnett conceived
the cowboy emblem of Malboro. The Malboro Man thus emerged and spread globally
as a symbol of the authentic American hero.
"So many people around the world
want to emigrate to America, and Malboros represent an inexpensive 'psychic
downpayment on achieving that American dream'. "
The step that was done was to ensure
Philip Morris' prosperity until nowadays.
A point can be made here regarding
the advertising strategy. Indeed, the healthy cowboy inhalating cancerigenous
smoke reached unprecedented success around the world and it is interesting
not only to state it but to understand why. I will refer to an exerpt of
John Berger's book, Ways of Seeing. Indeed, the author analyses the impact
of publicity upon the mind and emphasizes the prominent part of the imaginary.
These remarks are valuable for many advertisements and are particularly
relevant in the case of Malboro, as the gap between the image transmitted
and the reality of the product is astonishingly wide.
"Publicity speaks in the future
tense and yet the achievement of this future is endlessly deferred. How
then does publicity remain credible - or credible enough to exert the influence
it does ? It remains credible because the truthfulness of publicity is
judged, not by the real fulfillment of its promises, but by the relevance
of the fantasies to those of the spectator-buyer. Its essential application
is not to reality but to day-dreams. "
Another point can be made
concerning Philip Morris' capacity to seize opportunities when the situation
could turn to its disadvantage. By 1970, cigarette advertising was banned
from television. The Malboro Cowboy reached the summit of popularity displayed
on billboards and magazine covers. Moreover, its competitors who had adapted
their advertising to the television medium were left behind.
When the worldwide antismoking campaigns
gained significant ground among regular consumers, Philip Morris, in collaboration
with its competitors and the Tobacco Insitute, mapped a new strategy. Beside
legal actions initiated by the Tobacco Institute, new consumers had to
be found, to take the place of those who had stopped. After the middle-class
population looking for fun and freedom, the new targets were those who
most needed to dream and to whom the health hazards were likely to be less
relevant. The new customers were then low-income women and poor people
in general (most of the time African-American and Latino communities).
As the war over smoking intensifies
in North America, Philip Morris has been, from the late 1990s onward turning,
to the developing countries (of Asia, Africa, Latin America and Eastern
Europe)
The invention of the Malboro man
can be considered as the emblematic figure that launched Philip Morris'
popularity. Yet, a good advertising campaign was not sufficient to face
the growing antitobacco movements, and Philip Morris' strategy was diversification.
In the extracts of the Chairman and CEO (Chief Executive Officer) Geoffrey
Bible's speech, the strategy is made clear: "We sandwiched the Philip Morris
brand between a couple of bedrock-solid food brands we'd had the foresight
to acquire. Raisin Bran, Kraft Dinner, Miller Beer : these are allegiance
products. "
3) Diversification
This strategy had a double
scope : it both serves the corporation's interests by providing new assets,
and in the case of tobacco industries, it also serves their marketing image
by counterbalancing the negative reputation as 'death-sellers'. Philip
Morris thus became purveyor of basic food (milk, coffee, cheese...)
Two major purchases were made and
the three brands are now presented side by side.
In 1970, Philip Morris Inc.(reorganized
in 1967 into Philip Morris USA, Philip Morris International, and Philip
Morris Industrial) acquired the Miller Brewing Company.
From that time, the Miller Brewing
Company generated record sales and moved to the n°2 among US brewers
(in 1977). This data shows that the merger was profitable for both parts
.
The Miller brand dated back to the
XIXth century, and Philip Morris took care in chosing well settled companies.
The man who can be said to have
launched Philip Morris' expansion is Hamish Maxwell, a talentuous marketer
with backgrounds in the tobacco industry. Since he was appointed chairman
in 1984, the company realized the most fruitful acquisitions.
In 1985, Philip Morris acquired
General Foods Corp. for $5.6 billion. Inbetween, it had also purchased
97% of the Seven-up company and sold it to PepsiCo in 1986.
General Foods and Miller keep buying
smaller companies to ensure prominence upon the market (Charles Freihofer
Baking Co. and Jacob Leinenkugel Brewing Co. for instance, purchased in
1987).
The greater acquisition remains
Kraft Inc., in 1988, for $13.6 billion. As it was the case with the General
Foods deal, most of the financing was provided by non-US banks.The following
year, General Foods and Kraft merged into Kraft General Foods.
Then, in 1990, Philip Morris acquired
Jacob Suchard, the Swiss-based company. A determinant step was then made
towards the European market.
Miller and Kraft remain the most
important acquisitions for Philip Morris and their brands are until now
presented side by side with Philip Morris. Nevertheless, the other purchases
and mergers (only the most significant are quoted here) guaranteed the
presence of Philip Morris in the major global markets (food and beverages).
The last significant acquisition was Nabisco in 2000, all the more significant
as it previously belonged to the other leader in tobacco industry, RJ Reynolds.
From the 1980s onward, attempts
have constantly been made to integrate tobacco to the wide food market,
and to get integrated in it. The strategy has since consisted in being
more and more powerful in the grocery business, as a counterbalance to
cigarette business. The corporation's logic is a simple syllogism. According
to Bible's own words (to be found in the extracts of his speech in the
appendix) : "This nis how our average California housewife does the math
: Oprah is a force for the good, Oprah likes Philip Morris, therefore Philip
Morris is a force for the good. "
II- Philip Morris and traditional American values
1) Promoting the name
The corporation's website
(<www.philipmorris.com) is directed to potential consumers (there is
no advertising for cigarettes but there are links to Kraft and Miller),
potential investors (the glorious story of the company and its impressive
revenues), and also potential supporters (Philip Morris as a great philanthropic
family). The site is also directed to any opponent to Philip Morris as
even the most controversiel issues such as health or lawsuits are tackled.
For example, concerning health and
addiction issues, advice and programs to quit are proposed. According to
the law, nothing is made to the direct promotion of cigarettes, and the
corporation plays the card of honesty and transparency.
As it is the case for any advertising
strategy, no room is left for any other point of view, any other conception.
I will here resort again to John Berger's book Ways of Seeing as an illustration
:
"Publicity exerts an enormous influence
and is a political phenomenon of great importance. But its offer is as
narrow as its references are wide. It recognizes nothing exept the power
to acquire. all other human faculties or needs are made subsidiary to this
power. All hopes are gathered together, made homogeneous, simplified, so
that they become the intense yet vague, magical yet repeatable promise
offered in every purchase. No other kind of hope or satisfaction or pleasure
can any longer be envisaged within the culture of capitalism. "
What is at stake is to show that
Philip Morris, after resorting to the American hero emblem that made its
succes keeps moving along this line of typical Amercican values : democracy,
equality of opportunity and freedom.
The website of the corporation is composed of diverse parts : About Philip Morris, Philanthropy, Press Room, Investor relations, Careers. There are also icons or logos on which the visitor can click (Philip Morris International, Kraft...). The history of the company, the part dedicated to investors are clearly meant to glorify the company by pointing out its never-flagging growth. The other parts are to be analysed more precisely as they clash with what one could expect to find in the site. They are meant to counterbalance the negative aspects and to oppose any negative view.
2) Philanthropic actions
: promoting equality of opportunity
"Here's the message : Philip
Morris is helping out. We're fighting domestic abuse, sending brave stricken
kids to camp, cleaning up the environment and just generally being one
amazing corporate citizen. And building trust one heart at a time. "
Supporting causes is part of Philip
Morris' history. In the 1950s, it was a pioneer in supporting and working
with blacks. Yet the reason cannot be fully philanthropic. The impact among
minorities was designed to make them enter the great family of Philip Morris'
supporters and products consumers.
" The National Black Monitor, a
monthly insert in eighty African-American newspapers, called on its readers
to oppose anti-smoking legislation, terming it a 'vehicle for intensified
discrimination against this industry which has befriended us...in our hour
of greatest need. " .
The campaigns were directed to national
minorities as well as to Third-world countries, such as Korea, Latin America,
Africa. The goal hasn't changed until today.
Facing growing attacks, Philip Morris
has enlarged the scope of its benevolent actions. A wide range of causes
appears on the site : Hunger, domestic violence, culture, Aids, education,
humanitarian aid, environment, employee involvement, grant guidelines.
No need to read the whole of thecorresponding
sections to notice that it is a bit excessive for such a company to care
about so many issues. Nevertheless they make it serious. The pages are
full of images of healthy and happy people thanks to Philip Morris' aid
programs. It appears as very far-fetched to one who is aware of the financial
and marketing interests of such actions. But it might well work in the
way underlined by J. Berger : it prevents the visitor of the site to conceive
any negative point, or at least serves as a counterweight.
An interesting strategy is to confront
appearances and reality. It is precisely what the magazine "Abusters" did
by placing side to side Philip Morris' publicity for its philanthropic
actions and some exerpts of the corporation's charter. These pages are
joined in the appendix and are relevant to analyse as they precisely illustrate
the double-dealing I have attempted to point out.
They are examples of the costly
promotion designed to make everyone aware of Philip Morris' philanthropic
actions. The values put forward are clear : gender equality (woman occupying
a position generally reserved to men), equality of opportunity through
minority-owned businesses (the pack of grape nuts is curiously reminding
of a cigarette pack), social concerns through moral and material support
to the aged. On the contrary, the tone of the chairman's speech is arrogant
and shows confidence in the manipulation devices.The message is philanthropic
but the goal is nothing but economical.
"With Nabisco now in the fold I
doubt there's a single household without at least one Philip Morris product
in the kitchen. That makes us virtually boycoot-proof. "
"Because of our growth-markets of
women and minorities are ripe and vast Beause we are the biggest producer
of consumer packaged goods in the biggest consuming country on earth. We.
Are. Smokin'. "
3) Consumers' freedom and
Philip Morris' "family"
" Publicity has another important
social function. The fact that this function has not been planned as a
purpose by those who make and use publicity in no way lessens its significance.
Publicity turns consumption into a substitute for democracy. The choice
of what one eats (or wears or drives) takes the place of significant political
choice. Publicity helps to mask and compensate for all that is undemocratic
within society. And it also masks what is happening in the rest of the
world. "
Philip Morris relies upon this idea
in its justification of smoking habbits.
"As a responsible cigarette manufacturer,
we believe in the principle of adult choice."
What is at stake is to find an intermediary
position between what would be tobacco-support (impossible in such a polemical
context) and anti-tobacco positions. Thus, the scepticals might join the
Philip Morris family rather than fall in the camp of class-action.
"Cigarettes are a legal product
that many adults enjoy, notwithstanding the serious health issues surrounding
smoking. Although it is appropriate for governments and health authorities
to encourage people to avoid risky behaviors, we don't believe that they
should prohibit adults from choosing to smoke. The decision as to whether
or not to smoke should be left o individual adults. "
Unfortunately it is hard to believe
in such a statement when knowing that the main targets of smoking campaigns
are the young and the poor, in their search for fun and dream. Moreover
can we still talk about choice when dealing with a product with addictive
effects comparable to those of heroin and which will be lethal for millions
of persons ? Obviously not and the argument is hypocritical.
Nevertheless ads can be found in
the Kraft and Miller websites accessible from Philip Morris'. Any consumers
of the Philip Morris companies, not necessarily a smoker, may belong to
the great 'family'. This term is often used when dealing with the workers
in the various companies or the beneficiaries of aid-programs. This somewhat
paternalistic approach is in keeping with the image of America they promote.
With Philip Morris, we are back to the old American dream of the self-made
man. Polemics and attacks are turned into a cohesive force. (they are under
attack, as if discriminated against because they sell tobacco so they join
the minority claims). This analysis may appear a bit strong but it is in
fact what is at stake beyond all these benevolent actions.
"' This business of constantly being
under attack is a marvelous thing in a certain way,' former Philip Morris
chairman George Weissman claims. 'It makes our people feel cohesive and
put-upon' ".
After reviewing some of the devices
used to manipulate people's minds, let's focus upon what needs to be hidden
by Philip Morris and is strongly denounced by tobacco-control activists
and organization for citizen control over corporate charters.
III- The other side of the mirror : class action and watch dog groups
Among current challenges to corporate power, the magazine "Adbusters" plays a great role. The impunity of the tobacco industry is denounced : political lobbying, involvement in cigarette smuggling, which only massive boycott can threaten. The scope now overpasses lawsuits dealing with diseases and deaths correlative to smoking.
1) Constitution and corporations'
protection
The right of people to revoke
corporations' charters is among the current issues. The expression "corporate
citizen" well emphasizes the fact that a corporate body is equal to a citizen
under the law. I will here borrow the editor of 'Adbusters' magazine, Kalle
Lasn's words :
"Then came a legal event that would
not be understood for decades (and remains baffling even today), an event
that would change the course of American history. In Santa Clara County
vs. Southern Pacific Railroad, a dispute over a railbed route, the US Supreme
Court deemed that a private corporation was a "natural person" under the
US Constitution and therefore entitled to protection under the Bill of
Rights. /.../ This 1886 decision ostensibly gave corporations the same
powers as private citizens. But considering their vast financial resources,
corporations thereafter actually had far more power than any private citizen./.../
In a single stroke, the whole intent of the American Constitution -that
all citizens have one vote, and exercise an equal voice in public debates-
had been undermined. /.../ One of the great legal blunders of the nineteenth
century changed the whole idea of democratic government ." (Culture Jam,
The uncooling of America TM, in Adbusters n°36).
This unprecedented event needs to
be mentioned as it throws light upon the current polemics in which Philip
Morris, and the leading tobacco TNCs in general are involved. I included
extracts of recent articles from Adbusters in the appendix.
"Adbusters" website abounds in articles
dealing with actions against Philip Morris.
For instance, Randy Ghent (Adbusters'
European correspondent) puts forward the way the law is often broken for
the sake of more power -reaching the very culture of countries after financially
dominating them - and greater profits.
The reaction from citizens must
be a revocation of the corporation's charter by relying upon the existing
laws exclusively (out of the impossibility to obtain corporate regulation.
"Let's start with a massive campaign
to revoke the charter of Public Ennemy Number One - Philip Morris, Inc.-
for constantly viloating the above "(d)" and "(e)" while marketing to minors
and covering up evidence of haelth risk, among other reasons ."
A precedent is refered to : in May
1998, New York Attorney General Dennis Vacco revoked the charters of the
Council for Tobacco Research and the Tobacco Institute. Vacco ruled that
the two agencies were "propaganda arms of the industry", complicit in "grave,
substancial and continuing abuse." The Supreme Court ordered each group
to file a $500,000 bond, and charter dissolution proceedings were engaged.
Yet, Philip Morris executives are
ready to spend millions to evade liability in court.
2) Political lobbying and
cigarette smuggling.
The exercise of power has
no limits and the leading tobacco corporations, including Philip Morris,
are involved in illegal actions such as political lobbying and cigarette
smuggling.
An important watchdog group called
INFACT takes a great part in denouncing these practices.
The illegal participation to political
parties financing is called "Soft Money". The companies exploit a void
in the law, although a 1907 law makes it illegal for corporations to spend
money in political campaigns. Only contributions for the purposes of "party
building" are allowed, and this is "soft money" .
In the article I refer to, the author
makes it clear that this practice is generalized and applied by many corporations.
It goes from conventions sponsoring to secret donations. It is even underlined
that these illegal funds have begun a sine qua non condition of successful
political campaigns.
INFACT challenges and denounces
these facts. In April 2001, its members organized the International Weeks
of Resistance to Tobacco Transnationals, to protest tobacco industry interference
in public policy through tactics like lobbying, political payoffs and public
relations cover-ups. Citizens are thus directly called to take concrete
action (that is the boycott of Philip Morris and all the products of its
companies, especially Kraft's and Miller's)
On the legal level, the FTCT (Framework
Convention on Tobacco Control), an international treaty that would limit
the tobacco's industry advertising, promotion and political influence is
being settled. No doubt that Philip morris might be lobbying for watering-down
such initiatives.
Yet, the NATT (Network for the accountability
nof the Tobacco Transnationals, comprising 75 NGOs from more than 50 countries)
is building support for strong corporate accountability measures in the
treaty.
Besides political pressure, the
tobacco transnationals join the organized crime and mafias in controlling
the smuggling of their own cigarettes. Philip Morris and RJ Reynolds are
now facing legal action brought by the European Commission for an estimated
£3 billion lost in taxes over ten years.
Conclusion
Philip Morris and the other leaders
in the tobacco industry are now facing growing protests, not only out of
the nature of their products, but also out of a will to undermine their
impunity in breaking the law. Indeed, their impunity goes beyond lying
about health issues. As it has been shown, they attempt to become part
of the cultural environment of citizens on a global scale.
Even though actions are led to counteract
them (Philip Morris even plans to change its name into "Altria Group Inc."),
George W Bush's government still favors corporate power at the expense
of citizens' rights.
A lot remains thus to be done but
organizations such as INFACT and Corpwatch or magazines such as "Adbusters"
have opened a way.
"In AmericaTM, the principles of
freedom and democracy have been swamped by the cult of celebrity and the
saturation marketing of companies like McDonald's, Nike and Philip Morris.
The brands, products, fashions and entertainments -the spectacles that
surround the production of culture - are our culture now. Only by "uncooling"
these icons and symbols, by organizing resistance against the power trust
that manages the brands, can America reassert itself. "
Sources