Category Archives: Altria

I toldja! Big Tobacco looks to get into the pot business

December 9, 2018 Pepe Lepew

I toldja! I toldja!

I knew this would happen. In fact, to be honest, I’m surprised it took this long.

As marijuana becomes legal in more and more of the U.S., I knew sooner or later Big Tobacco would look to get into the game.

Sure enough, a bunch of huge stories came out this week that Altria … the parent company of Philip Morris, makers of Marlboros, is investing $1.8 billion in Cronos, a Canadian marijuana company. And as we all know, marijuana was legalized across ALL of Canada a couple of months ago.

About 80 million people in the U.S. live in states where marijuana is now legal. Add that to the 36 million of so people in Canada … that’s a lot of legal marijuana users. And that number is just going to continue to grow as more and more states figure out that keeping pot illegal is not just stupid but also a waste of a BIG potential tax source.

So, tobacco sales in the U.S. have been in decline for decades. Big Tobacco is being forced to diversify … by pouring more energy in developing tobacco markets in the Third World, by investing in e-cigarettes (though the future of e-cigs is now in doubt with new FDA regulations being proposed) and now pot. It was totally predictable.

My biggest concern about Big Tobacco getting their beak wet in the pot industry is my fear that they’ll pull the same underhanded, amoral crap with pot that they’ve pulled with marijuana for decades. For instance, I could totally see Big Tobacco artificially adding nicotine into marijuana to make it physically addictive like cigarettes. (And then acting all “Moi? Not us!” before Congressional committees about it). Think of it. The pure, amoral genius of it. The most addictive substance in the world added … to marijuana. They would do it, too. They totally would.

One of the biggest worries about legalizing pot was allowing big corporations to take over the pot industry. I remember an article from a year or two ago worrying that the beer industry would get involved in pot. Honestly, that doesn’t scare me nearly as much as Altria or any tobacco company getting their paws on it.

Something to keep an eye on.

Altria, Chew in baseball, Chewing tobacco, tobacco litigation, Tony Gwynn

Tony Gwynn’s family files wrongful death lawsuit against Philip Morris

May 24, 2016 Pepe Lepew

Interesting story and the first time I’m aware of (I wouldn’t doubt it has happened before, but it’s the first I’ve heard of it) of family suing the tobacco industry because a loved one likely died of someone who died from a chewing habit, rather than a smoking habit,

Tony Gwynn’s family filed the suit in San Diego Superior Court against Altria (formerly Philip Morris). Gwynn died in 2014 at the age of 54 from salivary gland cancer after chewing tobacco for more than 30 years.

From USA Today:

According to the lawsuit, Gwynn became addicted to their products.

“The tobacco industry had a responsibility to disclose the risk they knew of to him,” Gwynn’s attorney David S. Casey told The Associated Press. “They did not. At the time he made a choice with them marketing to try tobacco at a time it was not disclosed that it was dangerous.”

I’ve no idea what the chances are for success in the California court system. In Florida, mostly because of the Engle decision about 10 years ago, a number of families have successfully sued and received multi-million-dollar judgements from tobacco companies for the deaths of their loved ones from smoking. There are more than 8,000 such lawsuits winding their ways through the courts in Florida.

The Engle state supreme court decision overturned a $140 billion class-action judgement against the tobacco industry, but the wording of the decision basically said smokers and their families have the right to sue the industry for damages, but they have to do it on an individual basis, not as a class-action suit. That opened the door to thousands of lawsuits in Florida against Big Tobacco, and so far, several dozen judgements have gone against the industry.

From a San Diego Union-Tribune story, apparently Gwynn dipped 1 1/2 to 2 cans a day from 1977 to 2008. Oh, man, that’s an insane amount of chewing tobacco. That’s more than 17,500 cans of chewing tobacco.

From the U-T article:

Gwynn’s son, Tony Jr., said his father was used as a “billboard” to promote the product. His father, an eight-time batting champion, was often photographed with a chew in his mouth during his 20-year playing career.

He recalled visiting his father after his playing career ended, in the hospital when the Hall of Famer was being treated for cancer.

“I remember him saying that he wouldn’t want this to happen to anybody else, especially having seen what my mom and sister and the rest of our family was going through with him, you wouldn’t wish that upon anybody,” he said.

The suit says Gwynn was a perfect vehicle for promoting the products to the target audiences.

“They definitely used him as a billboard,” Tony Gwynn Jr. said of his father. “If you were a baseball fan and watched a lot of baseball, one of the things you remember really well is the outline of those Skoal cans or Copenhagen cans in the back of the (players’) pockets. Everybody knew what it was. You were virtually a walking billboard without having to pay them. They got free advertising.”

Gwynn’s death prompted a push to ban chewing tobacco in Major League Baseball. MLB wants to ban it on the field, but is facing resistance from the Players’ Association. Expect it to be part of the negotiations for the next collective bargaining agreement.

Chewing tobacco has been banned in stadiums in New York City, Boston, Los Angeles, San Francisco and Chicago. Chew will be banned in all stadiums in California in 2017, including San Diego and Oakland. Toronto, Minnesota and Pittsburgh are also considering laws or ordinances to ban chewing tobacco in baseball stadiums in those cities.

One thing that could hurt the Gwynn family’s lawsuit. I seem to remember when Gwynn died, some doctors were quoted as saying salivary gland cancer isn’t caused by chewing tobacco. However, Gwynn himself said he never bought that and insisted that the cancer developed in the exact spot in his mouth where he always dipped.

Altria, Blu, Lorillard, Philip Morris, RJ Reynolds

Slumping cigarette sales prompts R.J. Reynolds-Lorillard to talk merger

July 12, 2014 Pepe Lepew

A very interesting story about major changes in the works in the tobacco industry.

The No. 2 tobacco company in America — R.J. Reynolds — is in talks to buy the No. 3 tobacco company in America — Lorillard (which I have misspelled Lollilard more times than I can count.). Imperial Tobacco is also involved in the deal.

This deal would create a $56 billion company and would create a monster rival to the dominant No. 1 tobacco company in America — Altria, otherwise known as Philip Morris (its dominant brand is Marlboro, of course).

Reynolds and Lorillard would combine for 42 percent of the cigarette market, joining Reynolds’ big product — Camel — what Lorillard’s — Newport. Other Lorillard brands are Kent and Old Gold, while other Reynolds’ other brands are Pall Mall, Winston, Salem and Kool. But, Camel and Newport are the dominant brands.

The new joint company then would sell off several of their smaller brands to Imperial Tobacco, a British-owned company that would then become the No. 3 company in America.

According to the New York Times, declining cigarette sales are driving this move, as both companies work to restore their past profits. E-cigs are also a factor in this deal, as the e-cig industry is booming (got mixed feelings about that), and Lorillard owns the No. 1 e-cig brand, Blu E-Cigarettes.

According to the New York Times:

Still, a takeover of Lorillard by Reynolds would represent the industry’s boldest response yet to a declining, if still profitable, market. A general drop in smoking rates and aggressive public health campaigns aimed at curbing smoking have cut into sales in the United States.

About 42 million people in the United States, or nearly 18 percent of the adult population, smoke cigarettes, according to the Centers for Disease Control and Prevention. That compares with about 21 percent of the adult population nearly a decade ago and 43 percent of the adult population in 1965, according to the C.D.C.

What remains of the traditional cigarette industry is dominated by Altria, whose Philip Morris arm sells one out of every two cigarettes in the United States.

Opportunity has beckoned in the new business of e-cigarettes. A deal by Reynolds to buy the leading purveyor of e-cigarettes could spur other mergers within the industry as manufacturers jockey for position.

“This transaction in our view will be very positive for the global tobacco industry and could be just the beginning of future transactions with e-cigs/vapor being the underlying catalyst,” Wells Fargo analysts wrote in a note.

Anyway, interesting story as the industry adjusts to a rapidly changing and evolving market. This deal is not cast in stone, as it must be approved by federal regulators and could face scrutiny over

Altria, COPD, Marlboro, Marlboro Man, Philip Morris, phillip Morris

Yet another Marlboro Man dies from smoking

January 27, 2014 Pepe Lepew 1 Comment

Incredible, yet another “Marlboro Man” dies from smoking. By my count, that makes four.

Eric Lawson, who portrayed the iconic Marlboro Man cowboy in Marlboro ads from 1978 to 1981, died this week of COPD at the relatively young age of 72. He appeared in anti-smoking ads after he worked for Philip Morris.

Lawson joins Marlboro Men models Wayne McLaren, Dick Hammer and David McLean, all of whom died of lung cancer. McLaren testified in favour of anti-smoking laws many years ago and Philip Morris tried to claim he was never a Marlboro Man model, but McLaren still had pay stubs calling him the Marlboro Man (what, a tobacco company LYING…?)

Altria, Big Tobacco, cigarettes, Philip Morris, smoking, Tobacco

Philip Morris profits down 8 percent in second quarter 2013

July 20, 2013 Pepe Lepew 3 Comments

Oh, happy day. Philip Morris (Altria), the No. 1 private cigarette manufacturer in the world, saw its profits drop a dramatic 8 percent in the second quarter of 2013, mostly due to lagging sales. Philip Morris shares dropped 2.5 percent as a result.

Here’s what is interesting. We all know the sales of cigarettes is down, so at first blush, this doesn’t seem to be a big surprise.

What IS a big surprise? The biggest reason for the drop in profits is the drop in sales of Philip Morris brands (mostly Marlboro) overseas.

One thing a lot of people may not realize is that while cigarette sales have been obviously dropping the U.S., the tobacco industry has weathered the storm just fine, mostly by expanding its overseas markets in burgeoning smoking regions such as India, the Philippines and Africa. Philip Morris is blaming a sluggish economy overseas:

According to USAToday:

The cigarette maker reported earnings of $2.12 billion, or $1.30 per share, in the quarter ended June 30, down from $2.32 billion, or $1.36 per share, a year ago.

Excluding excise taxes, revenue fell 2.5% to $7.9 billion despite higher prices. Costs to make and sell cigarettes rose more than 1% to $2.7 billion.

Cigarette shipments fell about 4% to 228.9 billion cigarettes as it saw volume declines in all of its regions. Total Marlboro volumes fell nearly 6% to 72.4 billion cigarettes.

Philip Morris International said economic woes in the European Union and increased excise taxes drove shipments down nearly 6% during the quarter. Shipments fell 3.6% in the company’s region that encompasses Eastern Europe, the Middle East and Africa. Shipments also fell 2.4% in Latin America and Canada.

In Asia, one of its largest growth areas, the company said that cigarette volume fell 3.5%, hurt by a recent tax increase in the Philippines, which saw a 16.5% decline in shipments.

Smokers face tax increases, bans, health concerns and social stigma worldwide, but the effect of those on cigarette demand generally is less stark outside the United States. Philip Morris International has compensated for volume declines by raising prices and cutting costs.

Anytime the tobacco industry is hurting that is great news. Perhaps its a bad economy, but maybe smoking bans, higher taxes and lower smoker rates in other countries is having an effect, as well. Of course, Philip Morris would never admit THAT.