Altria

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Background

Altria, known pre-2003 as Philip Morris Companies Inc., is the American parent company of:1

  • Philip Morris USA, a cigarette manufacturer
  • U.S. Smokeless Tobacco Company, a smokeless tobacco manufacturer
  • John Middleton, a cigars and pipe tobacco manufacturer
  • Nat Sherman, a premium cigarettes and cigars manufacturer (from 2017)
  • Nu Mark, an e-cigarette company
  • Ste. Michelle Wine Estates, a wine producer

In January 2019, Altria employed over 8,000 people in the United States (US).1

Altria’s tobacco arm owns four major brands, Marlboro, Copenhagen, Skoal and Black & Mild. It owned e-cigarette brands Mark Ten and Greensmoke.12 which were discontinued in December 2018,3 For more information see E-Cigarettes: Altria

Philip Morris USA vs Philip Morris International

Prior to 2007, Altria also owned the international operations of Philip Morris. But in 2007, the company decided to separate the firm’s US and international operations. According to the Associated Press, the move cleared “the international tobacco business from the legal and regulatory constraints facing its domestic counterpart, Philip Morris USA”.4
The spin-off was completed in 2008, leaving two distinct companies: independent Philip Morris International and Philip Morris USA (the latter remains under Altria’s control).5

For a brief history of the company and its origins in Richmond Virginia, see the Richmond Magazine’s timeline.6

Employees & Board Members: Past and Present

William “Billy” Gifford replaced Howard Willard as Chief Executive Officer (CEO) of Altria in April 2020. This came shortly after the US Federal Trade Commission filed a complaint over the company’s investment in JUUL (see below). Gifford’s appointment followed his promotion from Chief Financial Officer (CFO) to interim CEO after Willard took a medical leave of absence.789 Willard became the Chief Executive Officer (CEO) and Chairman of Altria in May 2018, replacing Martin Barrington who had held that role for the previous six years.

A full list of the company’s leadership team can be accessed at Altria’s website.

Other people associated with the company:
Elizabeth Bailey | Jody Begley | Gerald BalilesHarold BrownLouis C. Camilleri | David R . BeranJohn CasteenDinyar DevitreThomas FarrellDudley FishburnKevin FreudenthalCarlos Slim HelúCraig A. JohnsonThomas JonesDenise F. KeaneMartin LiptrotGeorge MuñozLucio A. NotoJohn R. Nelson  | Jr. Nabil SakkabMichael E. SzymanczykHoward A. Willard III

Affiliations

In 2017, Altria reported that it financially supported and had employees in voluntary leadership roles in the following commerce and trade organisations:10

US Chamber of Commerce National Association of Manufacturers (NAM) National Association of Tobacco Outlets (NATO) National Association of Convenience Stores (NACS) California Retailers Association New England Convenience Stores and Energy Marketers Association Virginia Chamber of Commerce Texas Association of Business.

Altria is also a member of the “Private Enterprise Advisory Council” of the American Legislative Exchange Council (ALEC), a national corporate lobbying organisation, and has a long-standing relationship with the tobacco industry.1112 PR Watch describe ALEC as “an influential, under-the-radar organization that facilitates collaboration between many of the most powerful corporations in America and state-level legislative representatives”.11 Head of Altria Client Services, Daniel Smith, sits on ALEC’s “Private Enterprise” board.1314 PR Watch reported that Altria and Phillip Morris had given ALEC US$1.4 million between 1995 and 2010.1215

Political Contributions

Altria declares its direct political contributions on its website.16 In 2018 the company declared US$4.2 million in donations in the District of Columbia (home of the US capital Washington DC), with over US$3.2 million going to Republican groups.16 In the 2018 US election cycle Open Secrets calculated that Altria has spent over US$3 million on direct political donations.17

The company also supports the Congressional Black Caucus Foundation (CBCF) and the Congressional Hispanic Leadership Institute.10

Political Lobbying

Altria employs professional political lobbyists, in part to undermine tobacco regulations in state governments. The Center for Responsive Politics stated that the company spent over $10 million on lobbying in 2017-18,17 and that the majority of the lobbyists they contracted had previously worked for the US government.1718 In 2018, Altria hired Mercury, a US public relations company to be its “Washington lobbyist on tobacco product legislation”.19

In April 2019 Politico reported that Altria had recently hired a former aide to Kentucky Senator and Senate majority leader Mitch McConnell (a Republican), to lobby on tobacco issues.202122 In May 2019 Senator McConnell introduced a national bill to raise the legal age for buying tobacco and e-cigarettes from 18 to 21.232425 An earlier draft of the bill had been described as too “industry-friendly”, and risked undermining stronger state controls over youth smoking and vaping.2526 McConnell, who has been described as a “long term industry ally”,26 received a donation of US$79,000 from Altria to his 2018 election campaign.27 The bill’s co-sponsor, Virginia Democrat Senator Tim Kaine, received just over $US80,000.28

Lobbying in Kentucky

In January 2018, the Louisville Courier Journal reported that the Kentucky Legislative Ethics Commission records showed that the highest paid people working at the Kentucky Assembly were lobbyists paid by large corporations, including tobacco companies, to influence the State government.29 The records named six lobbyists that listed Altria as a client:30

  • James “Jitter” Allen
  • Linda T Magee
  • John T McCarthy III
  • John S Rainey Jr, Altria
  • Michael (‘Mike’) Shea, Partner at lobbying firm Government Strategies

In 2018 Altria spent over $0.5 million lobbying the Kentucky legislature,31 including over $330,000 lobbying against a tobacco tax increase.32

Although the increase was voted through, the bill did not appear to include a planned tax on e-cigarettes.20 Ben Chandler, President and CEO of the Foundation for a Healthy Kentucky (and a former member of Congress) said:

“We had it in the bill and it mysteriously disappeared on the last day of the session…we’re still not entirely sure where it went.” 20

After a meeting between Senator McConnell and the Foundation in Kentucky in April 2019, e-cigarettes were included in McConnell’s ‘Tobacco Free Youth’ bill.25

Lobbying in Colorado

In April 2019, The Colorado Sun revealed that Altria had hired “at least 10” lobbyists to stop a new bill approving an increase in tobacco tax, and a new nicotine tax which would include vaping products, in the US state of Colorado.33 The bill aimed to raise money for health and education programmes in the state.34

Altria paid for a website and social media accounts, styled as “No Blank Checks for Colorado”, which appeared at the same time the bill was announced and encouraged voters to contact local Democratic politicians. 33

In 2016, Altria had successfully lobbied against an amendment to Colorado state law, which proposed an increase in taxes on tobacco products in order to raise $300 million for health and education. The company contributed $16 million to the campaign against Amendment 72 (“No Blanks Checks in the Constitution”), which was rejected by Colorado voters by a small margin.3435

Public Lobbying Websites

Altria’s tobacco companies (Philip Morris USA, U.S. Smokeless Tobacco Co., John Middleton, and Nat Sherman) have set up two websites “to provide our stakeholders with information on proposed legislation and to facilitate their communications with their elected officials”.36 One website Tobacco Issues37 provides a lobbying platform for tobacco retailers and other trade members. It details proposed legislation; gives information and arguments that can be against regulation (for example on tax); and provides tools for contacting media and lobbying decision-makers, including a model letter.37 The other website, Citizens for Tobacco Rights,38 performs a similar function for “adult tobacco consumers”,36 and includes instructions for using Facebook and Twitter to spread information and lobby politicians.39

Funding Universities

The Commonwealth Times revealed in April 2019 that Altria had donated more than $2.5 million to Virginia Commonwealth University (VCU) between 2016 and 2019.40 Altria is the biggest company in Richmond, and the university’s biggest corporate donor.40 Recent donations include funding for students in STEM (Science, Technology and Maths) and business subjects, and $1 million to support the VCU School of Engineering.41 This relationship has been longstanding with Altria regularly giving large sums to the university, including donations to the School of Education ($1 million in 2010),42 and the da Vinci Center for Innovation ($1.5 million in 2012).43

A spokesperson for VCU said that the relationship with Altria, had been “very beneficial to a number of areas in the university,” including employing students after their studies.40 In 2019 VCU banned smoking on campus, including the use of e-cigarettes and other tobacco products.4044It also receives grants for smoke free activities from the American Cancer Society and the CVS Health Foundation, and hosted a Tobacco-Free Higher Education Summit in April.40

VCU has been criticized, along with other American Universities including the University of Virginia, for accepting research funding from Philip Morris USA, an Altria company.45 In 2006 a contract worth US$1.3 million was signed between Philip Morris and VCU.45 According to the New York Times this required the company’s permission for researchers to publish their results or discuss their work, and gave patents and intellectual property rights to Philip Morris.46

In 2007 Philip Morris USA donated $25 million to the University of Virginia for “independent research” to “help prevent youth smoking, improve the effectiveness of smoking-cessation efforts and reduce the harm caused by smoking.”47 At the time, John T. Casteen III was president of the University of Virginia. He was appointed to Altria’s Board of Directors in 2010.

Funding Scientists

Funding scientists is a well-established strategy for the tobacco industry to influence the research agenda and create doubt about independent research and scientific consensus around smoking and health.48
Altria has a history of funding scientists.

In 2006, UK newspaper The Guardian revealed that Altria had paid Steve Milloy, the founder of the website Junkscience.com (which was part-funded by the company), under contract “until at least the end of 2005” to discredit studies, among other things, on environmental tobacco smoke.49

From 2010 to 2013, Altria also funded Brad Rodu, an outspoken proponent of tobacco harm reduction.50 Using his blog (rodutobaccotruth.blogspot.com), Rodu has criticised tobacco control experts in the US and the European Union (EU), and attempted to create doubt about the science behind regulations on potentially reduced risk products such as smokeless tobacco, snus, and e-cigarettes.51 For example, in 2013, when the EU was revising its tobacco control measures in the Tobacco Products Directive, Rodu called the EU snus ban “indefensible and immoral”.52 A blogpost earlier that year heavily criticised a study by the Harvard School of Public Health demonstrating that smokeless tobacco users were likely to smoke, with Rodu discrediting the lead author as a “tobacco prohibitionist” and the study as being “tainted by unscientific bias”.53

In 2012, Rodu praised Altria’s nicotine lozenge Verve in the Winston-Salem Journal, being quoted as saying “This is a positive development for American smokers, because it introduces them to another category of recreational smoke-free cigarette substitutes”.54 The article failed to disclose that Rodu was, at that time, funded by Altria.50
To learn more about the tobacco industry’s history of influencing science, visit our pages on how the tobacco industry commissioned research and reviews and created doubt about existing scientific evidence.

Next Generation Products

To improve the tobacco industry’s sustainability, tobacco companies have invested in tobacco and nicotine products that, unlike cigarettes, may show volume growth potential in developed markets.55These products are often referred to as Next Generation Products (NGPs), and are linked to tobacco companies’ harm reduction strategies.
In February 2018, Altria’s CEO Martin J. Barrington told investors that Altria’s goal was to be “the U.S. leader in reduced risk products”.5657

Altria has an agreement with Philip Morris International to distribute its e-cigarettes and heated tobacco products. In 2018 it bought a 35% share in Juul Labs.

In 2019 Altria announced that it was acquiring an 80% share in oral nicotine pouch On, produced by Swiss tobacco company Burger Sohne, which would be manufactured and marketed through a new Altria subsidiary, Helix Innovations.5859

On 1 April 2020, the U.S. Federal Trade Commission (FTC) filed an administrative complaint alleging that Altria’s 2018 purchase of a 35% stake in JUUL Labs, and accompanying agreement not to compete for six years following the investment, violated federal antitrust laws.6061 Altria refuted the FTC allegations in the press, claiming that its stake in JUUL “does not harm competition”.626364 Altria revalued its original $12.8 billion investment twice between 2018 and 2020, as the valuation of JUUL dropped from $38 billion to $12 billion, and in April 2020 Altria’s share price was also falling.7

Stake in Alcohol Industry

Altria owns wine producer Ste. Michelle Wine Estates and used to have a 27.1% share in SABMiller, one of the world’s largest brewers and bottling companies, before that company merged with AB InBev in 2016.65 Following the merger, AB InBev became the largest beer company in the world, of which Altria owns 10.2% as of January 2020.66

TobaccoTactics Resources

Relevant Link

Altria homepage

References

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