This 27-page Philip Morris (PM) strategy document from 1993 outlines how PM successfully fought a proposed smoking ban in Austin, Texas.
Among PM's core objectives stated in the document is to "Manage external and internal perceptions to benefit our business."
PM laments the effect smoking bans have had on its business:
"Smoking restrictions have been estimated, this year alone, to have decreased PM profits by $40 million."
The document discusses the company's application of its "Accommodation Program" as a tool to help prevent or delay the enactment of laws restricting public smoking.
Page 21 of the document indicates that PM is fighting popular sentiment towards smoking restrictions: ,
"--Antis continue to seek smoking bans on the local level. --Recent polling says Californians want smoking restrictions."
PM's strategies against public health efforts are revealed on the next pages:
"Introduce legislation to scatter anti's resources...pursue numerous accommodation bills...Pass language which allows smoking in California and preempts localities from approving more onerous laws..."
PM also reveals plans to attack and hobble the charitable health organizations that pursue smoking restrictions:
"Regulate charitable organizations... [pass laws requiring] reporting requirements for percent of funds used for research vs. salaries. Cap administrative costs, salaries, lobbying expenditures. Establish minimum percentage of funds for research..."
And more strategies for PM's use of its Accommodation program to "refocus antis" are revealed:
"--Seek local level Accommodation laws in a limited number of localities to refocus antis and show accommodation is acceptable."
In addition to revealing how PM "played" the city council in Austin to defeat the proposed smoking ban there, the document also discusses the company's strategies for defeating excise taxes.
Fields
Notes
From Ness-Motley collection
Produced by: PMI
Affected Defendants: PMI, RJR
Quotes
CORE OBJECTIVES
Minimize impact of Federal, State and Local taxes on the retail price of our products.
Protect the rights of Adult consumers to smoke.
Protect PM-USA's ability to market our products.
Manage external and internal perceptions to benefit our business.
SMOKING RESTRICTIONS
Situation Analysis:
The Bad News
The EPA Report received wide publicity and has caused an acceleration in proposed bans and restrictions.
Currently 47 states have some form of smoking restrictions. Smoking is restricted in Private workplaces in 19 states; 28 states restrict smoking in restaurants. This year alone 18 states and 269 localities passed smoking restrictions. Measures are still pending in 6 states and 165 localities.
Smoking restrictions have been estimated, this year alone, to have decreased PM profits by $40 million.
Restrictions in shopping malls and arenas have been added to workplace and restaurant restrictions.
The Good News
More than 9,000 restaurants nationwide participate in the Accommodation Program. Over 250,000 merchandise pieces have been distributed featuring The Accommodation Program Symbol.
Thirteen states currently preempt local smoking restrictions.
Since 1989, 29 states, the District of Columbia and the city of Boston have enacted legislation which prohibits employment discrimination against smokers.
...Recently utilized The Accommodation Program to effectively advance Government Affairs' legislative agenda in a number of states.
In response to proposed statewide smoking ban in Pennsylvania last month:
Identified restaurant owners to testify at hearings
Maximized use of exhibit booth at PA Restaurant Association Trade Show to mobilize business owners to sign a petition, and write letters to elected officials.
Produced timely VNR [video news release] which was widely aired across the state.
...AUSTIN, TEXAS
Situation
On 12/2, City Council Agrees to Hear Proposed Smoking Ban Ordinance in One Week or on 12/9.
Proposal Bans Smoking in Restaurants and Other Public Places and Severely Restricts Smoking in the Workplace.
Austin, Texas City Council is as Liberal as the Berkeley, California City Council.
Strategy
SMOKING ORDINANCE
AUSTIN, TEXAS
Create Coalition to Kill Ordinance in One Week
Urge Coalition to Seek Less Onerous Ordinance
Resources Activated
PM and RJR smokers call city council members prior to the hearing and testify at the hearing. PM hires consultant to organize the hospitality industry. PM consultant convinces Austin Restaurant Association to oppose the ordinance and joint the Texas Restaurant Association's activities. TX Restaurant Association phone banks restaurateurs and hires local consultants to Lobby Individual City Council Members. PM and RJR salesforces circulate flyers to retailers, restaurateurs, entertainment contacts and consumers.
Miller Distributing alerted and has agreed to assist.
Smoking Ban Ordinance was Defeated on a 3 to 3 vote.
--5 hour hearing was held on 12/9. --125 witnesses sign up to testify
--63 for the ordinance (anti-smoking activists, health group representatives)
--62 against the ordinance (e.g. restaurant and bar owners and employees, bowling alley and bingo parlor proprietors, smokers rights activists, music industry representatives, smokers and a few nonsmokers. --Coalition continues to work for more reasonable ordinance. --Next hearing delayed until February 1994...
...Antis continue to seek smoking bans at the local level...
1994 National Smoker's Alliance 1994 - to present. Front group formed by Philip Morris Tobacco Company to oppose smoke-free laws without its corporate involvement being detected.
CORE OBJECTIVES
Minimize impact of Federal, State and Local taxes on the
retail price of our products.
Protect the rights of Adult consumers to smoke.
Protect PM-USA's ability to market our products.~
Manage external and internal perceptions to benefit our business.~i,.=~ii!..
CIGARETTE SXCISE TAXES
Situation Analysis:
The Clinton Administration seeks to increase the federal excise tax on cigarettes
up to 75’ per pack to support a national health care program.
State cigarette excise taxes have increased at an average annual rate of 8,5%*
and states are tying increases to state health care programs on an accelerated
basis.
Although only 9 states allow local excise taxes on cigarettes, the number of cities
and counties taxing, the product is increasing. In 1987, 392 cities and counties
taxed cigarettes. By the end of 1993, that number will rise to 439; an average
increase of 8 new taxing units per year.
1994 is an election year and therefore we may not face as many battles as this
past year.
* Slightly lower for an election year, and higher for a non-election year.
::.: ~: ::-.'-..~. Ovel'a]l, most respondents had a greater awareness of the proposed
'-;--.tunding sources (i.e., cigarette, gasoline and Income tax) for the
~ :°= ~ National Health: Care Program than about the plan. Most respondents
::.~ .i.~ h~ad little Understanding-ofthe core intent of the program and how
....... i ] :,.the. ~rogram Will personally affect them.
..the Federal Government's ability to administer the program.
~.;13i~t~restii~gly, the majority were in favor of national coverage
despite their Confusion about the plan and their cynicism about
~:.~ . ~.-Attitudes about funding tend to reflect how consumers feel they will
be personally affected by any increases in tax or copayment sources.
That is, most respondents were 'more than happy to "pass the buck"
- to someone elSe or Share theburden provided the tax was not on a:_
-: :~ ; ;product they use on a regular basis (such as gasoline, etc.).
" :~-~ spontaneous reactions tO the cigaretteexcise tax tended to be driven
~.:-:,,~+~i by"resl~ondents' personal attitudes about smoking. The non-smokers
i. ~~ ~?_~~sli_o.~!d~par_ry a...greater Share of the financial burden; ' Most Of these
............ individuals feel that smokers add to the cost of healthcare and
.......................... ..... therefore should= ........... bear a g~;e ater portio n-0f the
.............................. burden.
: ...... ;. T-hei~Ogt ~ser@fia-sive ai, gume-i~t~- aoainst the excise tax on cigarettes
~. ~ ~.- ~iN~.~-.. ..........................................................
-- -Job& Income Loss
,.. Bluecollar respondents related to this argument on a personal
~ " level " including theii~selves/family/friends as being directly
.......... : .......... !affec.~e_q,:..~y the..tax. White collar respondents were more
........... .~;"- d~t~chi~d-fationalizing the ~;g-ument as persuasive because Of
i:~I' ...... :- ~,. : .... it~ negativeimpact on jobs and the economy.
! ~ ~ i: .'-- -'5~ !. 2.: , " " ....
" .......... " .........................
~--: ~"
., that the government Wastes/misspends money. The blue collar
of our
_ . :~g.r~ip_s..._.w_e_._r.e...p_articuiaHyad&mant about taking care
.... nation's problems be~org-/~-~-e~d-ifig m~ney on foreign aid.
. ~
~..,,~,~..--=~.Bad Revenue Source
-.; ...... ~ThiS was also brought up independently. Many smokers and
.......... " ..... '~ nOn-smokers easily grasped the problem of relying on an
....................... ~--'unreliabie-revenue base~ for a IOng:termprogram and
~.~: ;-i !i ;=.~.. ;; .e.xpressed concern. ,over this issue. ....
=~:!-~The. ,s!hgling out One group" argument also received a fairly
..~ i::emot!~l £~sponse. aos,t- smokers and a few non-smokers felt that
' !--i. L~'~"~i~*~fl~;~~i~-r~x~tiOh'i~divisive-'~-a~entiment that ~as nbt ........
.... i positively received. Smokers tended to feel particularly strong about
i ..; i! this issue.
SMOKING RESTRICTIONS
Situat=onys~s: .. ' : - ~
The Bad News
The EPA Report received wide publicity and has caused an
acceleration in proposed bans and restrictions.
Currently 47 states have some form of smoking restrictions. Smoking is
restricted in Private workplaces ih 19 states; 28 states restrict smoking in
restaurants. This year alone 18 states and 269 localities passed
smoldng restrictions. Measures are still pending in 6 states and 165
localities.
Smoking restrictions have been estimated, this year alone, to have
decreased PM profits by $40 million. - .
Restrictions in shopping malls and arenas have been added to
workplace and restaurant restrictions.
The Good News
More than 9,000 restaurants nationwide participate in the
Accommodation Program. Over 250,000 merchandise pieces have
been distributed featuring The Accommodation Program Symbol.
Thirteen states currently preempt local smoking restrictions.
Since 1989, 29 states, the District of Columbia and the city of Boston
have enacted legislation which prohibits employment discrimination
against smokers.
MOBILIT TTON CON'ITNUUM
..... il| |1 III I I II I I I I I I | I II I I
SoucrrATION
Direct Mail
,'rrade ~ ~
NRAEF
ISRAE
Chains
PHASE II
ENLISTMENT
Materials
Source Book
Training Video
HVAC Technical
Support
MOBILIZ CONTINUUM
I I I I I I I I I III i II I
SOLICITATION
Trade Show Exhibits
- NFIAEF
ISR/E
ENUSTMENT
#8(X) Hotline
Free Slgnage &
Matedals
-Source Book
Trldrdng Video
, HVAC Technical
SuPlx:Ct
PHASE HI
RELAllONSHIP
BUILDING
° Quarlerly Iq~
* Issues Bulletin
-Trade
* Spea~ers' Bure=u
J~r~ Efforts (KGF/M~C]
- Video New=le~er
- Seminars
MOBILIZA Ti N CONTINUUM
PHASE N
SOUCITATION
"Presentations
Direct Mail
. Trade Show Exhibits
ENLISTMENT
Free Signage &
Materials
Source Book
Training Video
HVAC Technical
Support
RELATIONSHIP
BUILDING
Quarterly Newsletter
Issues Bulletin
- Consumer
- Trade
Joint Efforts (KGF/MBC] - Video ~~
- Seminars
MOBILIZATION
Develop "SWAT" Teams
Recently ulitized The AccommodMion Program to effectively advtmce
Government Affaim' legislative agenda in a number of states,
In response to proposed statewide smoking ban in
Pennsylvania last month:
Identified restaurant owners to testify at hearings
Maximized use of exhibit booth at PA Restaurant Association
Trade Show to mobilize business owners to sign a petition, and
write letters to elec~e~ officials.
Produced timely VNR which was widely aired across the state.
69e~}}Og
SMOKING .5AN ORDINANCE
AUSTIN, TEXAS
Situati.on
.On 12/2, City Council Agrees to Hear Proposed.
Sm.oking Ban Ordinance in One Week or on 12/9
Proposal Bans SmoEing in Restaurants and Other
PubliCokl~ Places and Severely Restricts Smoking. in the
Austin, Texas City Council is as Liberal as the Berkeley,"
California City Council.
SMOKING i AN ORDINANC
. AUSTIN, TEXAS
Resources Activated
PM and RJR Smokers Call City Council Members Prior to the Hearing .. ~;..
and Testify at the Hearing ..,.
+"o PM Hires Consultant to Organize Hospitality Industry ~~..
PM's Consultant Convinces Austin Restaurant Association to Oppose
the Ordinance and Join. the Texas Restaurant Association's Activities
TX Restaurant Associa.t n Ph.o.ne Banks Restaurateurs and.Hires Local
Consults to Lobby Ind=v,dual C~ty Council Members. . i
nd R o $ u e s, Re
PM a JR Salesf rce Circ late Fly rs to Retmler staurateurs,
Entertainment Contacts and Consumers
iiller..~Distributor Alerted and. Has Agreed to Assist ~+. ..
SMOKING BAN ORDINANC
AUSTIN, TEXAS
Smoking Ban Ordinance was Defeated on a 3 to 3 Vote
~ -- 5 Hour Hearing Held on 12/9 '
--- 125 Witnesses Sign Up to Testify
-63 for the ordinance (e.g., anti-smoking activities, health grou~i
representatives, etc.)
-62 against the ordinance (e.g., restaurant and bar owners and~
..... employees, bowling alley, and bingo parlor proprietors, smoker~
rights activistsi music.!ndust~ representatives, smokers and a fe~
, ...~. ~.,. non-smokers.~
..= CoalitionContinues to Work for More Reasonable Ordinance.
. Next Hearing Delayed until February 1994
..~.~,i..~i!i ~! ~ ~ ~.i~ , i ..... ~
" _iii.i .i: 1994 CALIFORNIA PLAN
.. Situation . ............................ ...
-;- _ ........ -. ;: ~-- ,_ .
;; :;~?i~E MAJOR CITIES HAVE BANNED SMOKING
-!?: ~ :.San Francisco BansSmoking in all Workplaces Inclu(~ing Offices,
Restaurants, etc. .
-- Los Angeles Bans Smoking in Restaurants (referendum pending)
-- San Jose Bans Smoking in all Public Places Including Restaurants
:-~ : ": ...... ;.~: ....
...~ ;~.~
. ~ "i'~ii "~. san i~iego ~B~ns Smoking inthe Workplace and Restricts Smoking,"
to 30% of Seating Capacity in Restaurants
m Sacramento BansSm0king in Offices and Restaurants
Antis Continue to Seek Smoking Bans on the Local Level
Legislative Leadership will Negotiate Deal between industr~ and Antis
but Only if We Put Antis on Defensive Outside of Legislature .
' "---F~e~,-~iPo'lii~g Says Californians Want Smoking R~.tri~ti~ns ....................
...... " t ' ' " A.rgumentsLosing as
Indus ry s Economic Impact Credibility Glanzl
~-~::Stu'dies Have More Credibility with Media :
- -Two State Level Bills are Pending Final Disposition
-- AB13 (Friedman) Bans Smoking in the Workpiacelncludin~:
Restaurants .... :.- : " : :
..... m. AB996 (Tucker) Allows Smoking in Public Places .Including
Restaurants ....... ................ , .,~.. , .... .~.. ~ .
.o.CAL-OSHA has a Minimum Ventilation Standard Regulati0n,fo~i
; " W0r.kplaces A ioved in 1986
~ , .....
~.. = .... ..;- : :...: ..... :. -: : :: ..... .. .... ., ....
:: .... . ...... ... ..... ..-., ~. ........
.. ........ :;.,~., " :': .....
" " - . .,. ~
. :~.::i,. ..,..,..~" " . .,;
.......=,. .....
~: ....
..... 1994 CALIFORNIA PLAN
Pass Language WhichAll0ws Smoking In California and Preempt..$
Localities from Approving More Onerous Laws " .,
Strategy ..
LEGISLATIVE -- Introduce Legislation to Scatter Antis Resources m State Level
Pursue Passage of AB996 .or Other Comprehensive
Accommodation Legislation
-Introduce Numerous Accommodation Bills
Appropriate Coalition Members
Workplace (Buslness Organizations)
Restaurant (Local Restaurant Associations)
Hotel (Hotet~Motel Association)
- Pursue Cl~anges i~Pr~p 99 Funds Allocation
Vending Restri~tio~s/Preem ption
Supported by
Legislative Audit of How Funds Have Been Used Since 1989
o Reallocate Funds for Other Purposes Such as Youth
Education
-- - Proactively Seek Marketing Legislation. :., ...
: ADAMHA Licensi.~g/Preemption to Comply with Federal
-.. . ..... HHS Rules and Regulations Based on Synar Language "
~ . .~
..,~, :: ":.
1.994 CALIFORNIA PLAN
-Reporting Requirements for Percent.of Funds Used for
Research vs. Salaries
Cap Administrative Costs, Salaries, Lobbying Expenditures
Establish Minimum Percent of Funds for Research
-Pass Joint Resolution Urging US-OSHA to Develop IAQ
Standards
- Bell Gardens
Seek Local Level Accommodation Laws in a Limited Number of
Localities to Refocus Antis and Show Accommodation is
Acceptable , _.
Anaheim .. ~ -
Rancho Mirage
- El Cajo.n
- Coronado
- Stockton
1994 CALIFORNIA PLAN
Jl II .--.~_,~__.-~_~=..~- -- ~ __~.~-.-. _~--. ...... ~--
_ ___ -r,.~--
--St-~ate--g£ ..... ...........
....._.-LEGAL - Sue a Locality for Banning Smoking in the Workplace
Based on Current CAL-OSHA Statutory Authority Preempting Other
" standards forthe Workplace
.-...; ~:..m San .Francisco Ordinance Bans Smoking in the Workplace and
Defines Workplace Br0ac~ly - "
--~.._ Legal Department Concurs and Has Retained Local Firm to
Pursue Possible Suit in San Francisco
Other Local Ordinances are Pending Legal Review to Identify
Other Possible Venues .:~
--Strateav ...........
INITIATIVE ~ S~ng Restrictio~Preemption Initiative on the
NOvember 1~4 ~ .
-- PreliminawP~F~ Results
-~. - -. . ..
.. " .
..._, ;.~ .~..~.
........ i :~ Overall S~~ for Restrictions as Oppos~ to All Out Ban
" - PMUSA M~gng Research is Reviewing Polling Meth~o.o~
and R~ults to Determine Whether Additional Polling is
R~uir~
~ Deadline to Q~ In~iative
Februaw 1, 1~ File ~nguage with AG - 25 Working.
Days for Legislative Analyst and .~.
- --~ Dir~tor of Finance ...... :.: ...
March 5, 19’J4
" March 19, 1994
~ March 20, 1~4
..... ..--i~ 'May 2, 1994
15 Calendar Days for AG
AG Authorizes ..............
Begin Signature Collection 45~ Days
(45 Days for LA or 52 days if we
begin January 31, 1994)
Tum in signatures for Random
Sample (6.5% validity is required on
652,000 signatures) ...... ~...
qualify =nitiative for November!994_~_ ’=
