Isabelle Sinic :
© December 2002
Philip Morris, Incorporated
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. "
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'
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
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.
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. "