This month Congress passed new regulations on cigarettes and tobacco that were long fought by Republicans and the Bush Administration. It requires European labeling — 14 rotating graphics and lettering so it looks like part of the package — saying stuff like “Smoking causes fatal lung cancer” (these labels are tricky, if they are too graphic and scary, like a skull and cross bones, teenagers flock to them like, well, addicts flock to coffin nails. If they don’t rotate users get inured.
The F.D.A. will not be able to ban cigarettes or nicotine; but, it can order a reduction in nicotine and other harmful ingredients. Smokers will now know a cigarette’s ingredients and companies cannot suppress research about cigarettes and tobacco’s health effects. All new tobacco products will have to get marketing approval from the F.D.A..
That is the part Philip Morris likes.
In a mature smoking environment, as in the case in all advanced market economies, the business strategy for cigarette companies — and any addictive product — is market share, not expanding the number of users. Anything that prevents new products protects the dominant manufacturer. (It is one of the reasons we emerge from recession with more monopolies).
The only thing that really reduces smoking and the tobacco industry’s profits is an increase in taxes, and by extension, prices. The most potent tool Congress has to reduce smoking — short of banning them — is to raise the price, and it didn’t do it this round. Phillip Morris would have lined up with the rest of the industry to stop that.
Why? Guess what everybody — when the cost of cigarettes goes up people buy and use less of all brands.
The Robert Woods Johnson Report shows that states with the lowest smoking rates have the highest taxes. In New Jersey, the tax is over $2.5 and 13 percent of the population smokes, in Mississippi the tax is 18 cents of the national average and over a quarter of the population smokes.
The New York Times got it right, “It still might not have passed without the decision by Philip Morris, the industry leader, to accept regulation.”
As the title of Richard Kuluger’s Pulitzer-winning book indicates, Phillip Morris always comes out smelling like a rose in an ashtray: Ashes to Ashes: America’s Hundred-Year Cigarette War, the Public Health, and the Unabashed Triumph of Philip Morris.
(Image is here)
One Response to Tobacco Regulation: Public 1, Phillip Morris 2
jonas482 - February 7, 2011 at 6:59 am
I think we will see a major shift for people who smoke cigarettes go towards “vaping” as afforded with electronic cigarettes. This “smoke relief” will in turn affect the big tobacco to the point where we could see these big companies using their might and clout to position themselves favorably, and profitably in the movement towards electronic smoking.