How Philip Morris uses public relations to change the regulatory environment of the tobacco industry… Ann Landman exposes an apparently effective plan

Recently, an articulate and highly informative article by Ann Landman appeared on pr watch. Although quite critical and explicitly biased, it details Philip Morris’s current public relations activities to modify existing regulation of the tobacco industry in the United States, and (I believe) provides a most interesting backstage analysis of our profession—very stimulating food for thought for all of us.

For example, rather than simply complaining about social and media criticism of our profession, we should instead direct our activities towards demonstrating (maybe even exposing) the effectiveness and positive complexities of various activities. Here on PR Conversations, we’ve already provided some case studies of this nature. For example, the effectiveness of the Government of Tanzania, not to mention the Italian ngo Cesvi in Cape Town, or the industrial coalition against wildfires in Portugal.

So, what I’m pointing you to here is the case of a huge, (many would say) nasty and much-criticised tobacco multinational “doing its thing,” in what, even according to its fiercest critics, appears to be highly effective public relations practice.

First I feel the need for some (boring but necessary) disclosure: from 1976 to 1996 I consulted with Philip Morris in Italy and, during the second decade, I’d extended my assignment to the whole of the international tobacco industry in my country.

For critics and the curious, one may read a (far-too-detailed) story of my activities in that period by visiting www.pmdocs.com. (If you “search,” there are 508 documents for my full name; 497 for Toni Falconi; 408 for Toni Muzi; and 424 for SCR, which was the name of my agency at that time. Plus another 334 under CDIT, the Center of Documentation and Information on Tobacco, which I founded in 1986 and headed until 1996). And that’s not all; there are many other websites that disclose the “secret” documents of the tobacco industry activities over the last 40 years.

As you can imagine, the publication of these documents was not voluntary.

Let me recall… I had voluntarily terminated my contract with that industry in 1996, following 20 years of intense professional activity. Four years later, on a Saturday morning of the summer of 2000 I was weekending in a lovely house overlooking the stark blue Mediterranean sea off the Amalfi coast, when I received a telephone call from London. It was a British reporter of the very authoritative and reputed New England Journal of Medicine.

The conversation went something like this:

Reporter: Mr. Muzi Falconi, on the 23 of March of 1981 you visited the Italian Minister of Health and suggested he support a bill that would have reinstated purely informative tobacco advertising, which had been forbidden in Italy since 1962. In exchange, you added, the tobacco industry would have discontinued its pervasive promotional and sponsoring activities. According to a report you filed to the client, the Minister had replied he would think about it if you succeeded in convincing a significant component of the Italian publishing industry to violate the law, openly and defiantly advertise tobacco products and therefore create a case which would raise a public debate and oblige him to take a position. Do you confirm this?

TMF: I am afraid I cannot remember the exact date but this sounds familiar. How do you know?

Reporter: on the website www.pmdocs.com are hundreds of documents related to your correspondence with Philip Morris over the 20 years you worked for them, and the one I just cited is one of them. I want your confirmation, because I wish to trace the Minister of the time to make sure you were not overstating his willingness to consider that option.

TMF: But you surely are aware that following that encounter, Italy’s then-largest-publisher, Rizzoli, did in fact violate the law and published tobacco advertisements. Afterwards the public debate exploded, with a majority of comments from many sides, including anti tobacco and health activists, backing the change of regulation favouring a voluntary decision by the tobacco industry to refrain from below-the-line promotional and sponsorship activities.

Reporter: Sure, but this never happened. Why didn’t the plan succeed?

TMF: Please let me visit the website you mentioned; I will get back to you before Sunday evening.

When I called the reporter back, I indicated that the reason why the plan never succeeded was the result of my visit to the Minister, which had highly surprised my client, Philip Morris. Following top-level meetings with corporate headquarters in Bruxelles and New York and the Washington-based Tobacco Institute, the client advised me to drop this option (which had probably been inadvertently approved; I’m sure PM thought this wild idea would never see the light of day…) and think again….

As you may imagine, I spent that whole Saturday afternoon and night under great stress, speed reading (amazing experience!) all those documents on the website. Think of it like reliving in fast motion (as if in a dream), 20 years of your life.

Of course, I did find various compromising and somewhat embarrassing documents (mostly related to my contacts with public officials), but in my view almost nothing was so serious that I would not stand up for those same documents today; which left me quite relieved…mainly because only one month earlier, I had been elected president of the Italian Public Relations Federation (Ferpi).

In holding this position I wished to avoid a potential ongoing shooting or blackmailing exercise by those (inside and outside the association) who had opposed my candidacy or who for some reason would be inclined to make a public issue of this. What I decided to do was immediately and publicly disclose the website’s URL by an open letter to the three most-read daily newspapers (Corriere della Sera, Il Sole 24 Ore and La Repubblica) , which was probably one of the best decisions I have ever made. (Disclosure: to a certain extent this is what I am doing with you readers as well…)

Of course I also contacted PM’s headquarters in Rome, Lausanne, Bruxelles and New York and told them I was absolutely furious at not having had been informed of the public release of those documents. The reply I received was they had been forced to do this in the context of a trade-off agreement with, if I remember correctly, the US Congress. Which was legitimate, but still did not answer my question of why wasn’t I informed of the public disclosure of the documents?

I called a legal friend and, once I confirmed to him that I still possessed in my archives 20 years of reciprocally signed (by my company as well as by Philip Morris), non-disclosure and confidential agreements, I could sue Philip Morris and be rich the rest of my life….

And this explained to me why they never told me about what had happened. It is clear they had underestimated the explosive growth of the Internet and did not want to be so sued.

Of course, I never did sue PM… also because (and now we arrive at the core of my confession), in my 45 years of experience, I believe I have learned more from my colleagues at Philip Morris than any other company or PR professionals.
There is nothing like external pressure to stimulate innovation and creativity; there is nothing like a crisis to induce effective crisis management.

Finally, not having done anything in my professional capacity that I believed to be either criminal or totally unacceptable, I asked myself if, apart from their stupidity in not having warned me, it was really so important for me to become rich at the expense of a simple breach of contract by a client who had served me well (and vice versa) for a 20-year stretch?

So, as you might gather, I am myself quite biased just like the author of that pr watch article. Only on the other side when I say that PM’s program (so clearly and convincingly detailed by Anne Landman) to modify the regulation of the industry seems to me to be very well thought out and enacted.

And, in this context, may I also add that I very much believe that the recent film Thank You for Smoking is another (clearly indirect) by-product of PM’s public relations skill, just like their well-publicized communication activities to reduce teenage smoking, which recently raised the eyebrows of the New York Times editorial page and led me a few months ago to a post on this blog, in which I advanced the consideration that Philip Morris knows very well that those activities are unsuccessful in deterring youngsters from smoking, but very effective in convincing specifically relevant stakeholder groups of the seriousness of their intentions…only to confirm the correct interpretation given by the prwatch article referenced in this post.

The core of this post is to invite you to read Ann Landman’s article with attention. In particular, try to rid yourself of any strong or weak anti-tobacco bias. Having done that, consider if the program (clearly described in a biased fashion) does not amount to an excellent description of a highly professional approach to our profession.

Naturally my preference would be for comments that address the specific policy issue (i.e., “what other ways do we have to remain a legitimate business?”), rather than a moralistic/ideological issue (i.e., “the tobacco industry is not legitimate and therefore it does not have a license to operate in the arena of public relations/affairs”). But I will be happy to accept both. Thank you for your input.

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16 Replies to “How Philip Morris uses public relations to change the regulatory environment of the tobacco industry… Ann Landman exposes an apparently effective plan

  1. Kristen, as far back as I can remember I cannot recall any corporation which, well aware that societal trends were going into a direction which would have caused severe market issues in a span of, say three years, did anything visibly ‘responsible’ to change strategy which might have hampered its short term results.
    To the contrary, they fought to delay that change and made significant money by every year they succeeded in forestalling constraining legislation. W
    hen this came, of course they were well prepared.

    I am not implying that in the closed walls those companies did not accurately plan for alternatives, because this behaviour more than irresponsible would have simply been dumb.

    PM’s case is, more recently, different.
    Not only did they publicly acknowledge (admittedly, very late, but certainly prior to its competitors), but they proactively lobbied for a substantial change in legislation requiring more public scrutiny and oversight.
    I tried to explain some of the reasons for this and of course, a couple of years later, the recent NYT article sheds more light.
    I am told, but have not verified, that a handful of SRI organizations decided to include Altria in their lists justifying this with that sole policy decision.
    Maybe someone can tell us if it is true.

    By the way, ou are of course aware that for many years now some Universities compare the SRI indexes with the SIN indexes (tobacco, alcohol, gambling…) and that the latter always and ‘outrageously’ perform better than the former….

  2. Toni, this is indeed an interesting ongoing debate. I’d be curious to know if anyone can think of any company (outside a Hollywood film) that voluntarily wound down or totally shifted its activities when evidence emerged of health or other basic ethical products with the product itself. because I am not sure that any move made by PM/Altria would be considered acceptable by today’s CSR standards except that one.

    (Disclosure: I’m a lifelong NON-smoker, although surrounded by smokers in my family. I’ve never even taken a single puff.)

    I also wonder why society is so much more tolerant of the industry selling alcohol than we are of tobacco? The older I get, the more damage I realize is done by alcohol, whether it’s health, drunk-driven accidents or violence.

    (Disclosure: I do enjoy the occasional drink.)

  3. Continuing the conversation on this very important issue, I inform you of a very thoroughly researched and well investigated report today in the new york times http://www.nytimes.com/2010/01/31/business/31altria.html?scp=2&sq=altria&st=cse which not only confirms many of the hypothesis we advanced in this this post fo two years ago (!), but sheds very interesting light on the policies and practices of a corporation which, true -as the article says- has gone from being number 2 as the most admired componay in 1990 to the more recent position of 204!, but is apparently and actively pursuing a policy of ‘societal alignment’ while continuing to make many profits and their shareholders happy…

  4. FYI, here is the top story in the January 4th (morning) edition of Marketing Daily:

    Next round in tobacco ad wars begin

    After a decade-long absence, cigarette ads are back in print, though the first brand to return to the medium is already taking a lot of heat and may see its ads snuffed out.

    Japan Tobacco, via its Canadian subsidiary JTI-Macdonald, is the first major tobacco company to resume its print advertising in Canada after a Supreme Court decision in June 2007 clarified tobacco advertising regulations.

    The Tobacco Act was introduced in 1997 to restrict tobacco advertising. Manufacturers challenged the act’s legality, but ceased advertising until their challenge was resolved. The Supreme Court ruling in June stated that tobacco companies could advertise in magazines with an adult readership of at least 85%.

    In December, ads for three JTI-Macdonald products appeared in publications such as Time Canada, the Torstar published Eye Weekly in Toronto and the Montreal Mirror….

    Read the rest here: http://www.marketingmag.ca/daily/20080104/topstory.html

  5. João – very interesting perspective and you make a good case for PR working to maintain legitimacy.

    I do struggle with tobacco as a business that knows it has a high customer mortality rate simply from those people using the product as intended. Also, that many of those customers are addicted, so without 100% free will.

    The industry seems to do little to break perceptions about smoking being a mark of adulthood or rebellion. Although in the UK, it has not overtly been seen to fight legal bans on smoking in public places.

    But this is an industry that has discovered that the ultimate message – Smoking Kills – can be placed on your product and do little to dampen demand.

    I don’t like the idea of saying such companies should not be able to employ public relations – but how anyone can do such work is beyond me.

  6. I hope someone is still reading this conversation as I arrive late in joining it. Sorry, I’m not going to comment on the tobacco industry, but rather on PM itself.

    I had a tremendous reality check by looking at the http://www.pmdocs.com website and at the http://www.prwatch.org article. I decided to go a bit further and went through Altria’s (PM Parent Company) 2006 Annual Report, the http://www.sourcewatch.org wiki on Tobacco (a part or prwatch) and an interesting website to map political connections http://www.politicalfriendster.com/ .

    After trying to process some of this, (and I speak not as an expert) I find that the facts point to a company that kept the same production procedures after having (at least very reasonable) scientific evidence that it was producing a very addictive product. Is this against the common good or against the public interest? I’d say (in spite of other ramifications) that this is first and foremost a lack of responsibility towards their consumers (as visible from the ‘Castano’ and ‘little Castano’ lawsuits, details available here http://www.sourcewatch.org/index.php?title=Peter_Castano).

    This, as well as dominant position in competitive markets and other market failures, helps explain the high cost of litigation in PM’s business. According to estimates in the 2006 Annual Report, the whole Altria is expecting from 2007 to 2016 some 6 billion USD/ year of litigation related cost of sales (this is roughly 3 times what they spend each year in Advertising and Research & Development). However, their management is confident that the “litigation environment has substantially improved” and expects that cash flow from operations and credit facilities will provide enough liquidity to run the business.

    That’s why one of the most important conclusions is that the nature of the PM business has probably moved from producing and selling tobacco to protecting the right to smoke and improving the social acceptability of smoking WHILE producing and selling tobacco.

    Is this what you would naturally expect from a company? In a sense, we could argue that it is because they are simply trying to protect their business. But what happened to industry associations and why doesn’t PM trust industry groups to do some of that public affairs effort (not only on its behalf but also on the behalf of competitors) that it is so keen in doing?

    Could it be that PM is trying harder to remain a legitimate company than to develop legitimacy for the whole business? The legitimacy of the tobacco industry comes from the production side (i.e. sustaining the economic importance of tobacco growers and manufactures – see also http://www.tobaccoleaf.org), the consumption side (i.e. supporting the right to smoke without embarking on prohibitionist regulations, effectively guaranteeing the right to an increasingly less damaging smoke by consumers or the reduction of second hand smoke effects), the commercial practices side (i.e. enforcing conscious commercial and advertising practices without proposing sales incentives that lead retailers to forget existing legislation) or the environmental side (i.e. reducing the externalities of tobacco consumption). And (perhaps this is where I might be naive) I believe we can find a number of ways in which PR can ethically support this kind of legitimization taking into account personal values and professional ethics.

  7. Heather, thanks for the comments. I concur with your insights into the ethical difficulties faced by PR practitioners…in fact I’ve contributed several articles for IABC International and IABC/Toronto on ethics and CSR.

    I have a bit of a problem believing, however, that we can successfully differentiate between “PR” and “publicity exercises”. Over the years, the perception of PR has changed for the worse…and as the saying goes: perception is….

    For me, this has meant that I went from proudly calling my website “SavvyPR.com” (now lying derelict) to almost complete avoidance of using “PR” in reference to my work.

  8. I agree with Heather that the reflective paradigm would be a relevant framework from which to view the PM case. Since there have been references to this paradigm also in other PRC conversations, I will do a post on the basic assumptions of the reflective paradigm to provide a little more depth for a discussion (rather than the one paragraph provided in ‘What is PR’). The question of CSR features strongly in this paradigm, so I don’t want to pre-empt the discussion. However, my own personal belief is that CSR is a corporate philosophy, and not isolated incidents—irrespective of whether the latter is done with the best of intentions or whether it is done for publicity sake only.

    Toni, with regards to the meaning of the ‘common good’, I provide a few extracts of what I found on Wikipedia, especially those that agree with how I see it
    http://en.wikipedia.org/wiki/Common_good.

    “In ethics and political science to promote the common good means to benefit members of society. Thus, in essence, helping the common good equates with helping all people, or at least the vast majority of them. In that sense, the term could be synonymous with the general welfare.”

    “The common good is often regarded as a utilitarian ideal, thus representing ‘the greatest possible good for the greatest possible number of individuals’….a quality which is convertible, or reducible, to the sum total of all the private interests of the individual members of a society and interchangeable with them”.

    “Some assert that promoting the common good is the goal of democracy (in the sphere of politics) and socialism (in the sphere of economics). Increasingly, progressive Americans are adopting the language of the common good to describe progressive values………. Concerning contemporary American politics, the common good language is increasingly identifiable with political actors of the progressive left”.

    For further views on the common good, have a look at http://www.scu.edu/ethics/practicing/decision/commongood.html

    Toni, with regards to your statement on David’s blog that the “public interest is usually determined by the law”:
    1. This might be the case to some extent in democracies, but even if it is, there is a considerable time lag (often years) before societal standards and norms become the law.
    2. Billions of people on our planet live outside democracies –in such countries the laws often are not in the public interest.
    3. Which country’s laws will regulate our global village and determine the public interest?

    I think that increasingly the public interest will be determined in the public sphere, assisted in no small way by the Internet.

  9. I don’t disagree with anything which has been said here, but I am sure we would all avoid unnecessary fancy tip tap foot dancing, if we could agree on what we mean by the term public interest.
    To see how complicated this is please take a look at this conversation I have been having with david reich at http://www.mpdailyfix.com/2007/08/may_i_see_your_license_please.html on the licensing issue.
    As I am having breakfast with him next wednesday, if you care to help me on this before I see him, I would be grateful…

    The issue comes up just about every day in the work place as much as in class with fortunately curious students.

    To me, an organization needs to consider, when confronted with any major issue, three quite diverse groups of interests:
    °the interest of the organization (which should be well identified and defined by its leadership);
    °the interests of its stakeholder groups related to that specific issue (which often are just as many… as well as conflictual amongst themselves);
    °the public interest.

    The most important result an organization can hope to achieve by an intelligent public relations activity, is to make sure that its activities on that issue do not conflict with the public interest and at the same time keep in due consideration the maximum possible number of interests of its stakeholder groups, while pursuing its own interest.

    So far so good?

    So how do I identify the public interest?
    Usually the public interest is represented (in what we agree to call a democratic system) by the hard and soft laws which are approved by decision makers who directly or indirectly we have elected to represent us.
    There is only one exception, and that is when the organization believes that the existing hard or soft law does not represent the public interest (and this happens for a variety of reasons…) and therefore, once more, democratic systems allow organizations and individuals to try and change that hard or soft law (referendums, lobbyiong activities and so on).

    You will agree, I am sure, that this is relevant in this-here- Philip-Morris-related-debate.
    Of course, Jean, ethics and moral issues are relevant.
    Let me say, for example, that my approach to this is different than yours (as you well know).
    To me, there are three levels of ethics to consider:
    °personal ethics (I have nothing against smokers per se, I have everything against prohibitionists per se, I do not buy most of the health related arguments…..);
    °professional ethics (I place utmost importance of what I do and how I do it, not who I do it for…this in fact goes to the first level);
    °organizational ethics (an objective constraint which differs organization from organization, and which I may effect only if I and when I convince others to change it).

    what do you think?

  10. I am with Markus on this one. Even if it is a legitimate business, there are ethical and moral considerations in any action we take in PR. Working to divide opinion or the effectiveness of opponents is a well practiced activity but you should consider to what end and if the result is in the public interest.
    This is the problem I have with tobacco. There is no public good worth arguing here. At least none that I can think of.

  11. Dean – I think personal values and ethics are essential, and most issues we see are because as individuals, people don’t question their actions.

    It can be hard for PR practitioners (particularly early in their career) to be so principled – even if they have studied ethics. They may feel ill-equipped in the practicalities of standing up for their beliefs (or financially dependent on the client/job). This is an area, where PR education should help more.

    On the CSR for PR-purposes point – I agree that too many initiatives are conceived for the wrong reasons, but wish we’d label these as publicity-exercises. The real purpose of CSR should be for strategic PR purposes – if we accept PR as being about relationships, reputation, values, etc etc.

  12. The was a time when I made a living promoting corporate social responsibility (CSR) and helping organizations develop and promote their CSR image.

    I remember the first time, years ago, a tobacco manufacturer exec attended one of my workshops with someone from their PR agency–it didn’t sit well with me. I certainly had no problem turning down work for another tobacco manufacturer some months later.
    The reason my work was attractive to tobacco manufacturers is the same reason I left that line of work…CSR is primarily just PR for too many corporations (and, yes, I do think of PR in a less-than-flattering way). Don’t get me wrong, I’m not naive…I’ve got a pretty healthy cynical streak. I’d just rather make a living with a clean conscience.

    Interestingly, I’m now the communications lead on one of the most comprehensive and aggressive tobacco control strategies in North America…I hadn’t consciously planned it that way, but it’s not surprising given the importance I place on values and ethics.

  13. I think this is a very relevant example for reflection on the ethical aspects of public relations. In her first comment on my recent post “What is PR?”, Benita considers the European perspective that links PR to concerns for broader societal issues and operating in the public sphere.

    Doesn’t this take PR beyond simply considering whether the activities undertaken are ethical, into the area of considering the impact of PR in relation to what benefits society?

    In which case, no matter how professional, isn’t lobbying for the tobacco industry against the public interest?

    Personally, I believe PR is necessarily partisan, even when representing the public interest to senior executives within our clients. As smoking is not illegal (disclosure: I am a lifelong non-smoker), why shouldn’t it employ professional PR practices?

    Indeed, as PR plays a role in helping change public opinion and even the legal environment, one could argue that even those with goals that are not currently socially acceptable, employ such skills.

    I also have an issue with those who criticise PR practices when they are directed towards goals with which they disagree – but are accepted when used for a cause they support.

    So educational outreach programmes are “unethical”, when promoting corporate interests, but pester power is acceptable when persuading children about environmental issues, eating healthy foods, taking exercise, etc.

    Greenpeace, Amnesty International, even PR Watch itself, utilise public relations very effectively to achieve their goals.

    Beyond ensuring that PR practices themselves are ethical, can we really say it can only be employed for socially beneficial purposes?

    Isn’t one person’s propaganda another’s professional PR?

  14. Markus,
    Call me! naive.
    In the Landman description I did not detect much smoke screening nor destroying people credibility activities: only identifying stakeholders very carefully and trying to forge alliances in order to divide antagonist groups which, unless it is done trough explicitly corruptive or other unlawful practices, is a fully legitimate and clearly effective tool. But it is always possible that I read it with filtered glasses.
    Not that I believe such activity does not take place…but not more, as far as I know, in PM than in other social, public or private sector organizations..

  15. Call me naive, but Ann Landman’s article left me uncomfortable. The programs and methods described may be effective, but what about ethical? Even if the article is biased (and I’d say it is) there still are enough indications of smoke-screening (you’d expect that from the tobacco industry, wouldn’t you), destroying peoples’ credibility etc.
    If we had to show (or prove) the effectivity of PR I’d rather not use PM’s (or the tobacco industry’s PR staff) as a model.

  16. During my years in Brussels, I worked for a European affairs think tank funded by Philip Morris (we were not allowed to deal with issues related to tobacco, food or drink), so I had the occasion to get to know many of the PR and public affairs professionals at that company. In general, I found them to be among some of the best I’ve ever met. They were often very prized by future employers because of the excellent skills they had gained while working at Philip Morris.

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