Tobacco Documents Online

~ N.w Yorkx 212-309-1400 Chkogoc 312-541.2020 ; DMr+oih 313-344-1177 Los Angdst 213-466-6124 Washington, D.C.: 301-656-4068 5626rat 617-536-2232 ~ . Phile4phiet 215-567-7600 Son F.andscst 213-466-6124 TRAN'SCRIPT Miani:305358J358 e FOR cHIiLIP MORRIS STATION WABC-TV ~ PROGRAM `JIGHTLI:1E CITY NY DATE ~4/05/y3 ~ ~ AUDIENCE SUBJECT =c?I::;_ MORRIS '3WERS =RICES ?rJLL TEXT _::RIS WALII;CE: :'obacco kills more Americans each year than ::omicide, car accidents, and AIDS all Wut -::=et"er. r+me__=a's -:ost popular brand just cut its price 40 -entt. Wii_ _r:at •.•..c4 -i.nother generation? Tonight, Cigarette :r-,_e wars. This _s ;-LBC ::ews Nightline. Substituting for Ted =:opce: and =epcrt_ ng Washington, Chris Wallace. Mhe.n. =:"e ::at:.=' s c_ggest tobacco company, Philip Morris, siasr•_s _::e ::,r--ce ,_ _ts m:ost popular cigarette, Marlboro,it is cia :-_Ws. So cza ::::at := contributed to a 68 ciollar ' drop on :n ::^e ::ow ----nes :^dustxial average. So big that public ::ea=:- exoerts warn, _nat :^eaper cigarettes will cause a serious :nc_ease in smokir.g, especially among teenagers. So big that ne_t•`•e- ?hii:p Morr_s nor :ts chief competitor RJR Nabisco or even _:e _ndustry`s Tobacco :nstitute would participate in this broadcast. ;n one :evei :.^e dec.sion to cut the price of Marlboro by 40 _ents a pack is ;ust business, an effort to hold on to market share, against the onslaught of discount brands, but whenever you talk about cigarettes, it's not just business. The price cut comes just as the Clinton administration is considering a monster tax on cigarettes to pay for health care reform, and just as the rate of smoking has bumped up after a 25 year decline. As ABC's Bill Greenwood reports the stakes on all this can't be higher. BILL GREENWOOD iREPORTER): Smokers have made tobacco one of the most profitable industries in the entire world, with annual sales of almost $45 billion in the United States alone. Marlboro brings in 221 of that amount. Talk about king size. Americans puff six billion packs of Marlboro's each year, as many as the next four brands combined. .. Whil. Rodo TV R.pae .nd.awn w aaw. dw acevracy of ewi.ricl auppli.d by it, 4 eamrso be isPmaible for mi#.s or omia.ions. Mol.nol suppli.d by Rodso M Rsports may be us.d'For hle and r.F.nnce purpos.s only. N awy not bs npodOC.d: sokW or publicly d.monqrohd or siiibil.d

- 3 - GREENWOfJD: The Centers for Disease Control says the tobacco industry needs to attract more than one million new smokers each year to replace those who died or kicked! the habit. The surgeon general claims slick ads that feature the likes of Joe Camel and the Marlboro man target teenagers and encourage 3,000 youngsters to light their first cigarettes each and every day. And lower prices make the habit more affordable for the youngsters. That's one of the reasons President Clinton is considering a $2.00 increase in the federal tax on cigarettes. New Jersey Senator -S'iIl Bradley has already movedto hike the tax to one dollar. SENATOR BILL BRADLEY (NEW JERSEY): The purpose of this tax is to turn the grim reaper into the health keeper. The purpose is to assure that there's adequate money to try to take care of those thousands of Americans who get sick every year because they smoke. GREENWOOD: Bradley claims the cost of medical care for smoking related illnesses now runs 50 billion a year. Philip Morris expects to lose more than 2 billion because of its price cut. But if that strategy attracts enough new smokers, it would be a short-term loss for a long term financial gain. This is Bill Greenwoodin Washing,ton for Nightline. WALLACE: when we come back, we'll be j'oined by a law professor who encourages the filing of lawsuits against tobacco companies, a public health official who specializes in the impact of smoking, and a securities analyst who says the Marlboro price cut will affect the entire industry. . . * WALLACE: Richard Daynard is the chairman of the Tobacco Products Liability Project, a public health advocacy group that encourages lawsuits against tobacco companies, and he joins us from our Boston bureau. Greg Connolly is the director of the Massachusetts Tobacco Control Program. Massachusetts recently imposed the highest excise tax on cigarettes in the nation, and he also joins us from Boston. Manny Goldman is a securities analyst for Paine Webber specializing in the tobacco and beverage industries, and he is in our San Francisco bureau. Mr. Goldman, strictly as a business decision, does it make sense for Philip Morris to cut prices so drastically? MANNY GOLDMAN (PAINE WEBBER): Well what Philip Morris is most concerned about is the possible deterioration of the Marlboro franchise which theoretically at least is one of the strongest in the nation, if not in the world. And the step that they're taking is a rather drastic one to put on promotion Marlboro at 40 cents'a pack, as they're indicating, is a very large step take. The fact they're putting on a promotion could be understood, the question is is 40 cents a pack too much to accomplish what they want to. They've done some market research that indicates that that's the .-~ ---% r • {R-.L.R.VG