Altria Group

Formerly Philip Morris, Altria brand names include cigarette brands Marlboro, Basic, Chesterfield, Lark, L&M, Parliament and Virginia Slims. Other consumer brands under Altria include Kraft, Jacobs, Maxwell House, Milka, Nabisco, Oreo, Oscar Mayer, Philadelphia, Post and Tang.

On December 15, the Illinois Supreme Court threw out a $10.1 billion verdict against Philip Morris and its parent company, Altria Group, saying they did not mislead consumers when advertising "light" cigarettes. [1]

The Chicago Tribune reports that Philip Morris' lawyers "contributed $16,800 to help elect a judge who cast a deciding vote" in the case. Judge Lloyd Karmeier "also received $1.2 million in campaign money from a group that filed an amicus brief supporting the cigarette-maker." The Illinois Chamber of Commerce, "which also filed an amicus brief in support of Philip Morris, contributed $269,338" to Karmeier's campaign. Yet Karmeier did not recuse himself. The court's press secretary said Karmeier "has tried to insulate himself from knowing the identities of campaign contributors and would not allow campaign contributions to have any effect on his ruling in this or any other case." [2]

Name Change to Altria: Escape from Tobacco

On Thursday, November 15, 2001 Philip Morris Companies, Inc. issued a press release saying the company intended to ask its shareholders to approve a change of the company's name to Altria Group, Inc. Philip Morris Companies operates Miller Brewing, Kraft General Foods, Bird's Eye, Louis Rich and other well-known food subsidiaries in addition to manufacturing cigarettes. PM Chairman and Chief Executive Officer, Geoffrey C. Bible, said he proposed the name change for two reasons: "a need for clarity," and "the evolution of Philip Morris Companies Inc." However, a corporate marketing strategy document was written by Landor Associates (a market positioning strategy consulting firm) for Philip Morris (PM) in December, 1993 by an "identity consultant" as part of PM's "Identity Development Program" provides early evidence that PM was attempting to escape the stigma of selling tobacco products by attempting to "re-position" its image in consumers' minds. The document concludes that the key to escaping the damaging association with tobacco was changing the name of the company.

According Landor Associates, chief among the problems caused by PM's close identification cigarettes were the following:

• "As awareness of tobacco issues increase, Philip Morris increasingly reacts/defends."
• "As 'tobacco' image of Philip Morris increases, market value of Philip Morris decreases."

The document also describes PM's "Future Business Focus" as "Away from declining, high risk, tobacco business" and towards the image of a "premier brand management company." According to the plan, the re-positioned company should be "Not tobacco related" and have "no negative connotations."[3]

Interestingly, the first "target audience" Landor listed for the corporate "re-positioning" was its employees, indicating that PM's employee morale was suffering, most likely from the stigma of working for a tobacco company.

On January 27, 2003 Philip Morris (PM) officially completed the change of its corporate name to "Altria Group." PM claimed publicly that there were two reasons for the change, the same reasons CEO Geoffry Bible had stated earlier. One was to avoid public "confusion" between its two branches (the domestic company Philip Morris USA and Philip Morris International, which sells cigarettes outside the U.S.), and the other was "to reflect the evolution of our enterprise and to set a platform for more evolution in the future." Privately, however, the name change was done for quite different reasons.

PM had contemplated changing it name for at least ten years. An untitled 1993 Philip Morris (PM) document reports on an internal corporate meeting held from December 6-8, 1993 at a conference resort in Virginia to "further the proposed repositioning of Philip Morris Co." The meeting was attended by key PM executives, senior representatives of PM corporate headquarters and PM's public relations company, Burson Marstellar. The purpose of the meeting was to address a slump in employee morale and the company's sagging credibility in general. It says that the company had to get away from being perceived as "just" a tobacco company. At this meeting, PM executives attempted to define what to do.

The repositioning sought to extract specific behaviors from downtrodden PM employees: "Engaging in good word-of-mouth about the company, selling us both inside and outside the organization, actively investing in the organization." (Which suggests that perhaps PM employees at the time were not engaging in these desired behaviors to a satisfactory extent.) Another goal of PM's repositioning was to boost the company's credibility among policy makers, universities and medical centers, who at the time were apparently reluctant to associate with PM. The report says a goal of the repositioning was to encourage "key universities and medical foundations to invest in NewCo..." It predicted that as a result of the name change, "[in 3-5 years we will be] able to secure endorsements from organizations who do not endorse us today." PM also wanted its institutional investors to "no longer [see] us as a tobacco company..." and to "see us as more than a tobacco company; as a company with a bright future and relatively low risk."

Perhaps most indicative of the attitudes (and egos) of Philip Morris executives at the time, is the brainstorming session near the end of the document, "Ideas for Launching NewCo." The list includes ideas like:

• Buy out the Superbowl
• Involve Howard Stern
• Build empty stadium...Fill stadium with Jell-O
• Own the Olympics
• Involve Rush Limbaugh
• Sponsor rave parties

...and starting an international homeless program.

Near the end of the list, it was suggested that these actions "Could tie to possible homeless charity contribution." This brings to mind Philip Morris' recent efforts to boost its corporate image by offering (and widely promoting its) philanthropic donations.

Concerns listed near the end of the document include that the repositioning "Could make the company look desperate," and that "Repositioning could hurt food [units] as it is formally linked to tobacco under NewCo."

Re-naming the company was clearly linked to boosting investor confidence, credibility and employee morale, and to diffusing attacks from "pressure groups" who, according to the document, after the repositioning woulc be instructed to "address themselves to our business units--not NewCo."[4]

The real reasons for the name change were further confirmed in a November 30, 2001 Philip Morris internal email between executives that suggests that the company's name change from "Philip Morris" to "Altria" is to divert attention away from the company's ties to tobacco and pull attention toward an image of "compliance, responsibility, philanthropy, environment...all the things we want Altria to be identified with. The email was written by James Spector, Vice President of Corporate Affairs at PM and was sent to Thomas Collamore, Vice President of Public Affairs at PM, and Steve Parrish, Senior Vice President and General Counsel for PM USA. Spector wrote:

"I know we have shied away from setting a revised purpose/role for the Altria Group, but in the current environment this seems like a perfect time for us to define the 'new' Corporation the way we want to... While on the face of it, it is just a name change, we also have the opportunity to highlight many of the iniatives that were already in place under PMCos Inc., but were unable to breakthrough becaues of the name confusion. We can begin to focus attention away from tobacco, and on to compliance, responsibility, philanthropy, environment, etc., all the things we want Altria to be identified with..."[5]

Personnel

• Craig L. Fuller was named Senior Vice President for Corporate Affairs at Philip Morris Companies in 1992.

• Ellen Merlo, Senior Vice President of Corporate Affairs. Merlo oversaw programs such as the Accommodation Program, Tort Reform efforts, a program to enact preemptive legislation in all 50 U.S. States(PM-drafted legislation to eliminate the ability of voters to enact smoking bans at municipal and county levels)

• Tina Walls
• Geoffrey C. Bible, President and CEO
• Michael Miles, President and CEO

Other SourceWatch resources

• Alexis de Tocqueville Institution
• Project Sunrise
• Tobacco industry

Internal PM documents

Information on how Philip Morris used disinformation is available from pmdocs.com, a webized collection of documents recovered during lawsuits against them.

Legacy Tobacco Documents Library [legacy.library.ucsf.edu], Philip Morris collection

External links

• Patricia Reaney, "Philip Morris hid passive smoke data", Reuters, November 11, 2004.
• Andrew Burrell, "Philip Morris deal sets investment scene alight", Australian Financial Review, March 23, 2005.
• Jamie Doward and Lea Teuscher, "Tobacco firms' subtle tactics lure smokers to their brand: Philip Morris and other cigarette giants take to subliminal style messages after cigarette advertising is banned," The Observer (UK), September 25, 2005.
• Barbara Rose, "Philip Morris law firms, supporters backed judge", Chicago Tribune, December 16, 2005.
• David A. Vise, "Court Overturns $10 Billion Verdict Against Philip Morris", Washington Post, December 16, 2005; Page D02.
• Patricia Callahan, Jeremy Manier and Delroy Alexander, "Where there's smoke, there might be food research, too: Documents indicate Kraft, Philip Morris shared expertise on how the brain processes tastes, smells", Chicago Tribune, January 29, 2006.
• Direction for Altria - PM document about name change [6]