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Tobacco Divestment Weighed

News Feature

Greg Connolly, analyst and adviser for theMassachusetts Public Health Department and for theWorld Health Organization, said that tobaccocompanies in the 1960s began sales campaigns inLatin America, opening closed markets and slowlyincreasing cigarette consumption. The sales pushoccurred in spite of growing domestic awareness ofsmoking hazards, he says.

Since then, multinationals have opened marketsin Africa and most recently Asia, sparking a majorfuror in some of the target market countries.

The latest assault by the tobaccocompanies--including Philip Morris and RJR--hasbeen on formerly closed markets in Japan, Korea,Taiwan and China. In all these countries tobaccoimports were prohibited or severely restricted inrecent years. In Korea, for example, it was acriminal offense to carry an imported pack ofcigarettes.

Many restrictions were lifted after bargainingefforts by the office of the U.S. TradeRepresentative, which threatened to imposeeconomic sanctions if tobacco compnaies were notallowed to trade on equal footing with domesticproducers.

But critics charge that the American companiesare moving beyond parity with Asian tobaccocompanies. The multinationals are spending hugeamounts of money on advertising, some in countrieswhere cigarette advertising was recentlylegalized. They are also distributing free samplesand using other promotional techniques now bannedin most Western nations.

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Some tactics were never used in the UnitedStates. In February, for example, RJR-Nabiscoplanned three concerts by noted Hong Kong singerHsow-Yu Chang in Taiwan. Fans could not pay fortickets with money, but were required instead to"pay" with empty cigarette packs. Five packs wereredeemable for a ticket.

But after a public uproar, promoters wereforced to cancel the performances, and promised toredeem empty cigarette packs for a cassette tapeof the singer.

New Markets

The U.S. companies are aiming to tap newmarkets in East Asia, where a large percentage ofadult males smoke, though consumption remains low.Traditionally, few women and adolescents have beensmokers.

In order to enlist new smokers, companies areairing commercials during music video programs.Virginia Slims cigarettes are currently marketedspecifically for women in campaigns that attemptto link smoking with fashion.

In most developing nations there are no lawsrequiring health warning labels on cigarettepacks. Cigarette warnings that do exist are oftenvague and much less strident than their Americancounterparts. In Taiwan, the government-ownedcigarette company uses a label that reads: "PleaseDo Not Smoke Too Much For Your Health." Americancompanies do not use any warnings forinternationally sold packs.

In addition, anti-smoking groups have chargedthat U.S. tobacco companies sell cigarettes abroadwith higher tar and nicotine content than thosesold in the United States.

Thus far the promotional techniques have madetobacco companies a rare success story in a decadethat has seen the decline of most U.S. exports.Philip Morris reports that in 1987 it sold $1.7billion worth of cigarettes internationally, up 10percent from the year before.

But the success has raised the ire of many inthe new markets. In the Philippines, a classaction suit has been filed against U.S. tobaccocompanies that advertise on television, chargingthat they have not allowed Filipino children thesame protection American children have againstexposure to TV smoking ads.

Health experts say that if the current increasein tobacco consumption in developing nations isnot curbed quickly, it will result in the mostserious disease epidemic ever known. World HealthOrganization expert Connolly estimates that by theyear 2000, there will be 900,000 smoking-relateddeaths in China alone.

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