Companies Look to the Future as Long-Running Federal Lawsuit Nears End
October 02 2017 - 6:57PM
Business Wire
Altria Group, Inc. (“Altria”) and Philip Morris USA, Inc.
announced today that they and other companies have agreed on the
timing of court-ordered communications about cigarettes and smoking
on television and in newspapers. The communications, which will
begin on November 26, 2017, stem from a 1999 lawsuit the federal
government brought against the major domestic cigarette companies
that focused on industry conduct dating back to the 1950s.
The court’s order requires the companies to publish five
statements related to cigarette smoking across several
communication channels, including newspaper and television ads, on
the companies’ websites and on cigarette packs for a year or
more.
“This industry has changed dramatically over the last twenty
years, including becoming regulated by the FDA, which we
supported,” said Murray Garnick, Altria’s Executive Vice President
and General Counsel. “We’re focused on the future and, with FDA in
place, working to develop less risky tobacco products.”
Today, tobacco is one of the most regulated industries in the
country. The way in which cigarettes are manufactured, marketed and
sold has changed markedly since the lawsuit was filed.
The 1998 tobacco settlement agreements with the state Attorneys
General led to significant industry changes. For example, the
settlement agreements banned cigarette billboards, stadium
advertisements and brand-name merchandise.
Restrictions became more extensive in 2009 when Congress gave
the U.S. Food and Drug Administration broad regulatory authority
over nearly every aspect of tobacco product manufacturing and
marketing.
“We remain committed to aligning our business practices with
society’s expectations of a responsible company. This includes
communicating openly about the health effects of our products,
continuing to support cessation efforts, helping reduce underage
tobacco use and developing potentially reduced-risk products,”
added Garnick.
According to government data, underage cigarette smoking has
declined to historical lows – falling from 28.3% in 1997 to 5.9 %
in 2016.
Background on the Federal Government
Lawsuit
In 1999, the United States government filed a lawsuit in the
U.S. District Court for the District of Columbia against various
cigarette manufacturers and their parent companies asserting claims
under various federal statutes. The lawsuit sought to recover
billions of dollars in health care costs for tobacco-related
illnesses. The government also sought disgorgement of company
profits and an injunction prohibiting certain actions by
defendants.
The court eventually dismissed all of the government’s claims
but one, and rejected the monetary penalties the government
sought.
In August 2006, the court entered judgment in favor of the
government on its remaining claim. The court issued findings
related to the companies’ conduct and a permanent injunction that
is in place today.
As part of the injunction, the court ordered the defendants to
make certain “corrective statements” related to issues raised in
the litigation. Since 2006, the parties have vigorously litigated
aspects of the injunction, including the content of the corrective
statements.
Altria’s Profile
Altria’s wholly-owned subsidiaries include Philip Morris USA
Inc., U.S. Smokeless Tobacco Company LLC, John Middleton Co.,
Sherman Group Holdings, LLC and its subsidiaries, Nu Mark LLC, Ste.
Michelle Wine Estates Ltd. and Philip Morris Capital Corporation.
Altria holds an equity investment in Anheuser-Busch InBev
SA/NV.
The brand portfolios of Altria’s tobacco operating companies
include Marlboro®, Black & Mild®,
Copenhagen®, Skoal®, MarkTen® and Green
Smoke®. Ste. Michelle produces and markets premium wines
sold under various labels, including Chateau Ste. Michelle®,
Columbia Crest®, 14 Hands® and Stag’s Leap Wine
Cellars™, and it imports and markets Antinori®,
Champagne Nicolas Feuillatte™, Torres® and Villa
Maria Estate™ products in the United States. Trademarks and
service marks related to Altria referenced in this release are the
property of Altria or its subsidiaries or are used with permission.
More information about Altria is available at altria.com and on the
Altria Investor app.
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