[Virginia GASP] 2001 PM Meeting - Some News Reactions

Please see also:
             2001 Shareholder Proposals
             Speeches in support of the proposals

             Geoffrey Bible's "Image" Speech;
             Bible's introductory remarks as printed;
             Bible gives up smoking

Associated Press, April 26, 2001
Richmond Times-Dispatch, April 27, 2001
Reuters, April 26, 2001

EXCERPTS from The Associated Press, April 26, 2001, writer Larry O'Dell, headlined:  Philip Morris Backs Tobacco Rules

RICHMOND, Va. (AP) - Federal and international tobacco regulations would help Philip Morris Inc. develop a "reduced risk'' cigarette, the company's chairman told shareholders Thursday.

Geoffrey C. Bible also said Philip Morris, the world's largest cigarette maker, should have a say in developing the regulations.

"We look forward to taking part in the process of creating a new and rational regulatory environment for the manufacture, sale and marketing of cigarettes - one that addresses health issues while respecting the principle of freedom of choice among adults,'' Bible said at the annual shareholders meeting.

"Regulation also would provide guidance and support for our efforts to produce reduced risk tobacco products,'' he said. "It would help us to define what is meant by "reduced risk' and how such products would be produced and marketed.''

Philip Morris, which is developing a cigarette with lower levels of some cancer-causing substances, has been lobbying Congress for federal regulation. Bible said company officials also support global regulation through a World Health Organization (news - web sites) treaty, which the 191 member governments will
discuss Monday.

"The regulation he's talking about is regulation written by his company's lawyers,'' said Edward L. Sweda, Jr., senior attorney for the Tobacco Control Resource Center at Northeastern University in Boston.  "We're leery of that based on a track record of a half-century of corporate misbehavior.''

A board member of the corporate watchdog organization INFACT told Bible during a shareholders' question-and-answer session that Philip Morris should not have a voice in writing regulations.

"That's like having the Ku Klux Klan help develop civil rights laws,'' said the San Diego man, who goes only by the name Akili.

Bible said it would be "very un-American'' to suggest tobacco companies should not be involved.

Philip Morris accounts for half of the cigarettes sold in the United States with brands including Marlboro, Virginia Slims and Merit. On Wednesday, it boosted wholesale prices by 14 cents a pack for the second time in just over four months. That could mean even higher prices for smokers at the cash register.

Philip Morris' food business trails only Nestle SA in that industry. Its holdings include Kraft, Oscar Mayer, Miller Brewing Co. and Nabisco, which it bought last year for $14.9 billion. Among the products sold by the combined food companies are Kool-Aid, Jell-O, Post cereals, Altoids mints, LifeSavers, Toblerone chocolate and Tombstone pizza.

The company plans to sell a minority stake in its food holdings later this year in an initial public stock offering. Bible told shareholders that Securities and Exchange Commission (news - web sites) rules prohibited him from discussing the offering.

Shareholders overwhelmingly rejected proposals to warn people about the hazards of secondhand smoke, ensure that tobacco ads do not appeal to youths, phase out genetically engineered food, stop funding smoking-related research using animals, better inform consumers about smoking risks, and adopt a global
 human rights policy.

The company's board recommended defeat of the proposals.

Outside the sprawling cigarette factory where shareholders met, anti-tobacco activists promoted a boycott of Kraft Foods begun by INFACT in 1994 and intensified in 1999 when Philip Morris began an ad campaign promoting its charitable works.

"We're here to demand that Philip Morris stop using ads that appeal to kids,'' said Kim Foltz of Boston, an INFACT member. "Specifically, we want them to drop the Marlboro Man.''

Critics say the rugged cowboy mascot for Marlboro cigarettes is designed to appeal to children. Bible said all the company's marketing is aimed at adults, and Philip Morris has no intention of retiring the Marlboro Man.

EXCERPTS from Reuters, April 26, 2001, writer Jessica Wohl, headlined:  Chairman Bible faces teens at Philip Morris meeting

RICHMOND, Va., April 26 (Reuters) - Philip Morris Cos. Inc.
(NYSE:MO - news) Chairman and Chief Executive Geoffrey Bible, a battle-scarred veteran of tobacco wars with activists and government lawyers, found himself answering to a 13-year-old girl at the company's annual meeting Thursday.

"My friends and I haven't fallen for the Marlboro man, but we're concerned about the spread of tobacco marketing to kids in other countries,'' Kaelyn Mahony, from Minneapolis, said.

Mahony was referring to the much-maligned cowboy Philip Morris, the world's largest cigarette maker, has used for years to advertise the company's top brand.

Mahony, who joined her anti-smoking activist mother at the meeting because Thursday was Take-Your-Daughter-to-Work Day, called for Bible and the company to "take the first step toward reversing the global tobacco epidemic by getting rid of the Marlboro Man.''

As in years past, Bible defended the company's position of giving adults the choice to smoke, and repeatedly said Philip Morris does not encourage underage smoking.

"We do not want kids to smoke,'' Bible said after Mahony's remarks.

"We are doing everything in our power'' to tell children that smoking is an adult choice, he added.  Those actions include an anti-smoking advertisement that debuted during the Super Bowl.

Another teenage girl, from Idaho, told Bible it was his and the company's responsibility to get kids not to smoke.

While the settlement of government-sponsored class action lawsuits prohibits the company from marketing toward children in the United States in any way, activists argue that the company's marketing practices still encourage children overseas to start smoking. Philip Morris has repeatedly denied this allegation.

During the meeting, a proposal to phase out use of genetically engineered food was defeated just months after Kraft had to recall 2.5 million boxes of taco shells which were found to contain StarLink corn. StarLink has not been approved for consumption by humans.

All six of the proposals presented by shareholders were defeated by at least 92.2 percent of those voting, according to a preliminary count. The proposals dealt with a variety of issues ranging from environmental tobacco smoke to global human rights standards.

EXCERPTS from The Richmond Times-Dispatch, April 27, 2001, writer John Reid Blackwell, headlines:  Philip Morris: 'A good year'

There was a new twist at the Philip Morris Co. Inc. annual meeting yesterday- a non-smoking section.

Philip Morris, which only a year ago was fighting regulation by the Food and Drug Administration, now "supports meaningful, tough and effective regulation of cigarettes by the FDA," Chairman and Chief Executive Officer Geoffrey C. Bible told the 1,200 shareholders at the company's sprawling South Richmond cigarette plant.

Bible also downplayed last year's verdict in a Florida class-action lawsuit, in which a jury ordered major cigarette companies to pay $145 billion in punitive damages to sick smokers. Philip Morris' share was about $74 billion. An appeal is planned.

Despite that verdict, it was "a good year" for Philip Morris, whose domestic tobacco business is the Richmond area's second-largest private employer with 6,524 employees. The company's sales and profit were up, and, in December, it acquired food maker Nabisco Corp., which employs about 740 people here.

Regulation of the tobacco industry will help set standards for the reduced-risk tobacco products the company is developing, Bible said. "We believe that it is our responsibility to aggressively pursue reduced-risk technology."

Philip Morris has been lobbying for regulation, but tobacco control advocates say the company's proposals aren't adequate.

As usual, a large part of the annual meeting consisted of anti-smoking activists drilling Bible with questions.

Ed Sweda, an attorney for the Tobacco Control Resource Center at Northeastern University, asked why Philip Morris is challenging a Massachusetts law that prohibits tobacco advertising within 1,000 feet of a school. The case is being heard by the U.S. Supreme Court.

"One would expect that a company devoted to the idea of keeping children from smoking would be obeying these regulations, not fighting them," Sweda said.

Bible said Philip Morris agreed to restrict its advertising in a 1998 settlement with 46 states that had sued the tobacco industry, but the Massachusetts law attempts to eliminate one of the few methods the company can still use to reach adult customers. "It just goes too far. We think it's extreme."

Outside the plant, demonstrators called for a boycott of Philip Morris' Kraft Foods subsidiary.

"We're really pressuring Philip Morris to get rid of the Marlboro man," said Kim Foltz, an organizer with the corporate watchdog group INFACT. "It's the largest source of tobacco addiction in the world."

[Virginia GASP]  Added 28 April 2001