Big tobacco cut down to size, yet again
04/02/02
America’s justice department is seeking unprecedented restrictions on the marketing of tobacco, according to recently-filed pre-trial documents. This comes as a surprise as the Bush administration had sought a settlement of the three-year-old case. The
The justice department wants to implement unprecedented restrictions on the marketing of tobacco.UNDER the Clinton administration, the tort bar in America enjoyed something of a heyday. Companies were assailed by a host of lawsuits. The biggest settlement was the $206 billion which the tobacco industry agreed to pay over 25 years to 46 American states to compensate for health costs incurred through state-backed health insurance schemes for treating smoking-related illnesses. Then the federal government got in on the act, launching its own lawsuit in 1999. Everyone expected that the suit would be quietly dropped by the Bush administration. After all, George Bush, as governor of Texas, had implemented a series of reforms that made it more difficult to sue companies. Republicans had been beneficiaries of millions of dollars-worth of campaign donations from tobacco companies. And attorney-general, John Ashcroft, though he considers tobacco companies to be “merchants of deathâ€, had proposed a settlement of the lawsuit last year.
Therefore, there was some surprise when America’s Department of Justice sought extremely harsh restrictions on tobacco companies in pre-trial documents lodged in court earlier this month. The civil suit alleges fraud, racketeering and conspiracy by the major tobacco companies to conceal the health risks of an addictive and deadly product. The suit says that smoking kills 400,000 people a year in the United Sates and costs some $20 billion a year in federal health-care payments.
The remedies sought for these grave alleged wrong-doings are far-reaching and focus on how cigarettes are promoted and marketed. Cigarette advertising would be allowed only in print publications, and then only in black and white. Half the space of any ad would have to be reserved for “graphic health warningsâ€. This would mean an end to the aspirational lifestyle advertising currently favoured by the American industry, as epitomised by the rugged cowboy “Marlboro manâ€. Just as the ads would have to reflect current-day health warnings, the suit also seeks that half of the surface of cigarette packages would have to carry similar “graphic health warnings.â€
Promotion and distribution would also be curtailed under the government suit. Trade promotions and give-aways, to which the industry turned following the marketing restrictions imposed by the settlement with the states, would be ended. According to the suit, trade promotions rose to $3.54 billion, or 43% of the industry’s promotional budget, in 1999. Cigarette companies would no longer be allowed to pay retailers “slotting fees†for placing tobacco products where they are likely to catch customer’s eyes. Such fees can be worth as much as $20,000 a year to a busy convenience store.
The suit is also seeking that companies be forbidden from labelling cigarettes as “lightâ€, “low-tar†or “mild.†They would also be required to list all ingredients, additives and toxic chemicals and would have to disclose their marketing research and how the cigarettes are made.
The suit is particularly aimed at curbing smoking among the young. The tobacco companies have long argued that their advertising is aimed purely at encouraging smokers to switch brands. But anti-tobacco advocates suspect that it is really aimed at getting youngsters to take up the smoking habit. The suit cites a secret industry study that surveyed smokers from 12 to 20 years old, even though many of those surveyed are not legally allowed to smoke.
The tobacco industry is, unsurprisingly, fighting the suit vigorously. A spokeswoman for Philip Morris, the leading defendant, called it “a politically motivated suit filed by the Clinton administration†that ought to have been dismissed. R.J. Reynolds, another defendant, said that the earlier states' settlement “comprehensively addresses the issue of underage smoking†and that it would fight any further restrictions.
The new proposed restrictions on the tobacco companies appear odd when compared to America’s stance on the global anti-tobacco treaty being sought by the World Health Organisation (WHO). The WHO likes what the American government has done at home and is urging others around the world launch lawsuits against tobacco firms as well. But the United States has not returned the compliment. It has blocked the WHO's treaty, with objections to restrictions on advertising, which it claims go against free speech, and to a ban on the use of words such as “light†or “low-tar†on cigarette packets, even though it is seeking just such restrictions at home. Henry Waxman, a Democratic congressman from California, has accused the Bush administration of a “breath-taking reversal in US policy—going from global leader on tobacco control to pulling back and advocating the tobacco industry’s position.â€
Just as there is an inconsistency between America’s stance on tobacco within and outside the United States, there appear to be tensions within the Department of Justice itself. The tobacco suit was filed to meet deadlines established for continuation of the lawsuit. Career officials are fully behind it. But until recently there had been doubts about whether Mr Ashcroft and other political appointees would give it the backing—and the funding—it required. However, Mr Ashcroft’s latest budget includes a generous increase to $25m in direct funding, to be added to $18m from other sources. The trial date is set for June of next year. The tobacco companies, once among the mightiest lobbyists in Washington, seem to have few friends left in either of America’s two main political parties