The Multinational Monitor

September 1988 - VOLUME 9 - NUMBER 9


TOBACCO ON TRIAL Merchants of Death: The American Tobacco Industry
Larry C. White, with a foreword by C. Everett Koop. Beechtree Books (Morrow)
Reviewed by William Jackson
MERCHANTS OF DEATH, based on Larry C. White's coverage of litigation by smokers against the tobacco industry and his own research into corporate histories, presents a thorough study of the legal framework of smoking-related liability litigation by profiling recent cases brought by smokers such as Rose Cipollone, John Galbraith and Sean Marsee (the latter a victim of chewing tobacco).

White shows us not only the outcomes of the cases (the book was written before the latest Cipollone verdict) but the arguments and defenses used by the tobacco companies to deflect suits--including the distorted use of the First Amendment of the Constitution to claim that cigarette advertising deserves free speech protection.

From their beginnings as simple cigarette companies closely tied to tobacco growers, White traces the growth of an industry that today is dominated by multinational corporations with diversified holdings and vastly increased interests and power throughout the U.S. economy and the world. The author states his case directly: "Like a cancer that has metastasized, the cigarette companies have spread throughout the American economy." The evidence White presents to support this disturbing statement is detailed and compelling. Tobacco companies have followed a trend toward promoting sales here and abroad and decreasing costs of production through overseas operations in countries such as Brazil and Zimbabwe. This trend has created tension within the old tobacco alliance of growers and manufacturers and their friends in Congress.

On the one hand, manufacturers would like to trade on public sympathy for domestic growers, on the other hand they would like to achieve more leverage on them by developing foreign sources of supply. This tension was crystallized in the controversy produced by the excise tax bill proposed by Representative Charlie Rose, D-N.C. At a time when there were mounting pressures in Congress to abolish the tobacco price support system, Rose proposed a small excise tax on cigarettes, 2 cents of which would go to support the tobacco price support system. The proposal was supported by many small growers but violently opposed by the tobacco companies which enlisted the support of Senator Jesse Helms, R- N.C., to defeat the measure in 1985.

In defeating this bill, the author argues, the companies laid the basis for later raising the price of cigarettes and reducing dependence on U.S. growers. The U.S. government, through its tobacco support program, created a vast tobacco surplus in warehouses in the late 1970s and early 1980s which put domestic growers in a bind. White argues that tobacco price supports "keep the price of tobacco higher than it would be in an unregulated market. Furthermore, the program limits who can grow tobacco and keeps the size of tobacco farms small." The real issue is what the consequences would be if the program were eliminated. If this happened, much more tobacco would be grown. The cigarette companies would contract with a small number of large farmers, or operate their own farms. The price of tobacco leaf would plummet and the companies would be in total control of both supplies and suppliers. The result: either cheaper cigarettes or higher profits for the industry. The division became obvious between growers who saw the proposed tax as a way out of ever increasing assessments which would make it "impossible" to continue growing tobacco, and Helms and his allies who declared that U.S. tobacco had become too expensive and should be cheaper so that it could compete with foreign leaf.

Cigarette companies have expanded their markets as they have increased their revenues and influence in the United States. Expansion into the Third World has been fruitful. According to White, some developing countries' governments are delighted at the new source of revenue generated by cigarette excise taxes and there is "little or no consciousness of the health risks of smoking." (See MM, July/August 1987.) White points to the alliance between R.J. Reynolds and the Peoples' Republic of China to produce a cigarette to be marketed in Southeast Asia as a case in point.

Despite diversification, White makes clear that the profit margin on tobacco for parent companies far exceeds profits on other products. When interviewed by the author, Tobacco Institute Vice-President William Kloepfer, said there is no chance cigarette companies will stop producing cigarettes because of the controversy they generate. Profits have increased steadily in the past 20 years, Kloepfer notes, and "those who talk of the tobacco companies abandoning tobacco are not themselves involved in the business and don't know much about it."

Another source of evidence supporting White's argument that tobacco is too profitable to abandon concerns how multinationals use their profits to influence the media and the political system. The selling of cigarette advertising to women's magazines, and the evidence that this has affected coverage of tobacco hazards in these same magazines over a period of time is a good example. Cosmopolitan and Ms. are criticized by White not only for accepting tobacco advertising but for their lack of coverage of smoking and health developments over a five-year period. Sports Illustrated is also taken to task for its failure to covers smoking and health effects and the way it covered health issues. White quotes from a letter from a Massachusetts Director of Dental Health to the editor of the magazine: "From 1982 to mid- 1986, Sports Illustrated ran 15 health stories, of which five were on cocaine abuse, four on sports injuries, and two each on steroid use, heart disease and physical fitness. In the 15 [stories], tobacco was mentioned in only two ... In the story on adolescent health (2/7/83), lack of exercise and poor diet were cited more than 150 times as causes of cancer or heart disease, but tobacco was mentioned only four times..." One-third of Sports Illustrated's readers are boys under 18 and the magazine earned a "whopping" $29.9 million from tobacco advertising in 1985 alone. White also notes that U.S. Tobacco hired football players and race car drivers and soccer stars to push Skoal and Copenhagen, two large selling brands of snuff.

When the U.S. Chamber of Commerce planned a major conference in New York on June 19, 1986 on "Critical Health Issues in the Workplace" for corporate leaders, the topics were to be smoking, alcohol, drug abuse and AIDS. Smoking was to be a major issue at the conference, since corporate leaders are under increasing pressure to provide a smoke-free workplace environment. According to White, who quoted Michael Berne, the conference chairman, Phillip Morris threatened to withdraw from the Chamber of Commerce if smoking was left on the agenda. White also quotes Berne's assistant as saying about Philip Morris "if they want to, they can break anybody." White concludes that health advocates need to be more selective in their choice of battlegrounds. Not focusing on the subsidy program as a primary target would be a good start, he says. They must also realize that there are differences between growers and manufacturers. He advocates tighter restrictions on advertising. For the public, renewed introspection about smoking hazards is required. Greater understanding at all levels must push against well-established habits of mind and action, habits that these "merchants of death" spend a lot of money to develop and are not about to abandon.