Philip Morris
840000 Corporate Affairs World Conference Rye Brook, New York 840912 Plenary Session
Fields
- Author
- Clephas, V.R.
- Maxwell, H.
- Pittman, D.
- Sapolsky, H.
- Scott, S.S.
- Zahn, L.
- Maxwell, H.
- Type
- TRAN, TRANSCRIPT
- LIST, LIST
- Area
- CORPORATE AFFAIRS/CARLSTADT
- Site
- N100
- Named Organization
- 1984 Corporate Affairs World Conference
- 3rd World Corporate Affairs Conference
- 4th World Conference on Smoking + Health
- 5th World Conference on Smoking + Health
- 7 Up
- Alcohol + Drug Abuse Comm
- American Assn for Cancer Research
- American Cancer Society
- American Heart Assn
- American Lung Assn
- Center for Science in the Public Interes
- Civil Aeronautics Board
- Conference on Business Opportunities
- Ctr, Council for Tobacco Research
- Diab
- Distilled Spirits Inst
- Fortune Magazine
- Miller Brewing
- Mission Viejo
- Mit
- Mothers Against Drunk Driving
- Natl Conference of State Legislatures
- Natl Heart Lung + Blood Inst
- Natl Inst on Alcohol Abuse + Alcoholism
- Natl Inst on Drug Abuse
- NCI, Natl Cancer Inst
- Ny Post
- TI, Tobacco Inst
- Tobacco Advisory Council
- US Brewers Assn
- US Congress
- US Senate
- Washington Univ St Louis
- Who, World Health Org
- World Health Assn Subcomm on Internation
- 3rd World Corporate Affairs Conference
- Named Person
- Aristotle
- Boley, J.
- Clephas, V.R.
- Colman, H.
- Cullman, J.
- Donohue
- Galbraith, J.K.
- Hathaway, W.
- Hawkins, P.
- Jacobsen
- Koop
- Maxwell, H.
- Mccormus, P.
- Murphy, J.
- Pittman, D.
- Ruder, W.
- Sapolsky, H.
- Scott, S.S.
- Surgeon General
- Weissman, G.
- Xxemily
- Zahn, L.
- Boley, J.
- Request
- Stmn/R1-006
- Stmn/R1-020
- Litigation
- Stmn/Produced
- Master ID
- 2025421657/2239
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- Date Loaded
- 05 Jun 1998
- Brand
- Benson & Hedges
- Marlboro
- Peter Jackson
- Players
- Raffles
- Virginia Slims
- Marlboro
- UCSF Legacy ID
- kxz88e00
Document Images
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important to the localities in terms of oconv®ics, 1n
teraa of jobs, In terms of corporate citis..nsbip. We've
got to stress freedom of choiee.
Opinion svrvoys nwr shar that three out
of five pe ople inchdiug nori-smokers oo+i say, ne've heard
enough about non-sookers right, it's time to.pritect the
rights of th ose wh o en j oy smoking.
A final chail"o..# our fiaal challenge
in my view is to help promote our brands. The opportunities
are there. Just]ook at 7-Oprs feisty moves against other
companies in the soft drink wars. It's a big agenda.
Building partnerships, internsl cawunications, consti-
tuency building, messages and marketing. But we have
great big res ources, of head and of heart.
We all know that if our opponents can
go after one of us, they can go after all of us. And we
know, too, what happens if we don't do battle each and
every day. Let's not forget we 've got a fine case of the
accomic contribution we mate around the world. And for
giving consumers free choice. Lat's not f orget that if
we work to get it, support f or our industries is out
there.
And finally, Laes not forget that at
Philip Morris, we've got something that's especially
precious.... a great and well-earned reputation. We
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support good causes and we make good things happen,
More than 60 years, Philip Morris has built a strong
image: Weire an enterprise whero quality, creativity,
integrity, fairness, and sensitivity only began to des-
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adsociated with
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~ Philip Morris. The reason I submit has something to do
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( with what Philip Morris stands for. We've got to keep
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on deserving that reputation and we've got to keep on
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s legitimate right
~ proudly fighting f or the corporation
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w to supply quality products to our millions of consumers
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ThatTS our chalienge sad thatt
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~ opporturtity. Thank you. (Applause).
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~ Now itis my very special pleasure to
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z introduce somebody whocsn tsY1 us everything we always
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wanted to know and more about the challenges and oppor-
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tunities that are ahead our businesses and our company.
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F The Chairman and Chief Executive Officer of Philip Morris,
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Inc, , Hamish Maxwel l.
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Those of you whomLght not have had a
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chance t o meet him yet might like to knom that he 's had
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more than 30 years in tobacco business. His father was
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a famous leaf-buyer in his native England.
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Hamish started with Philip Morris as a
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1 salesman in gi.chmnnd when the company was literaliy
2 an infaat. gver e-ince, hets been a part of the team
3 and haa engineered an enozmoars
growth and profitability.
4 A strong batkground in marketing and advertising and
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deft managerial hand, h.s played major roles in making
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people and their perfor.ance# A nice guy who likes, in-.
sists on finishing first,
Hamiah, we ic oeoe t o our Third 6J or ld
Corporate Affairs conference, We're delighted that you
took tive out from your schedule to be with us and we're
looking forward to hearing what you have to tell us.
Hamish Maxwell..... (APPIAUSE) .
MIL. HAMISIi MAMLL: Good Morn*ng and
thankypu Stan. And I would really like to congratulate
y ou on what I thought was a terrific keynote speech, It
really se t the stage for what I hope is a very productive
meeting for all of you.
I think this is my first Corporate Affairs
Conference. I'm relieved to know there were only two
before. But I'm very glad to be here and to try to con-
vey to you my optimism and confidence about our future
together at ?hilip Morris.
John Murphy and Hugh and I have been
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able to make the smooth transition we have enj oyed
largely because weive been backed by an experienced
and dedicated team. And that includes all of you.
. PhiLip Morris has the history of growth
and success achieved by good people and we've done bet-
ter in the past, but weive done better in tb.e past I've
got t o say thag we''re doing now. Tha0s not bad -- we're
doing we 11 now. But we have daoe better in the past and
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p for that reason we're going m have to work even harder
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~ Let sae bring you up to date a little
bit on where Philip Morris stands and then touch on s ane
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ambiti ons for our company and on your role in achieving
15 Q our goals. The lastest results for the first 8 months
16 z of 1984 show that in unit seles, 5 of our 6 operating
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17 o companies are ahead of the same period last year. The
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exception is Missi an Vie j o where sales of homes are down
because of high ititerest rates. This is an off-set how-
ever by gains in our industrial and commercial activities
and we're going to have a good year in Mission in spite
of the lower house sales.
Overall, the corporation's operating
revenues are up about 8 percent so far this year. Our
operatig income and net income are up substantially more.
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We should again achieve our annual goal of profit in-
creases that are at least 10 percent higher than the
rate of inf2ation.
Dtcsv let's look at the opesating compan-
ies. In Industrial, demand f.or east of our paper pro-
ducts continues to be strong,and margins are improving.
We're going to have a good year.
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7-Up this year.Miil muva from into the
red to into the black in terms of income. And extract
sales of both regular and diet 7-Up are at record levels.
Miller has moved up slightly in shipments
and market share. And 5as offset declines in Highlight
and bwenbrau with sales of Meisterbrau and Milwaukee's
Best, our twu njw brands.
Wetre confident that we'll be able to
maintain the momentum although thesix in the productline
is depressing profitability this year and represents a
c ontinuing challenge.
Philip Morris international with solid
marketshare gains in companies like Italy, West Germany
and France, Australia, Mexico, and many others ia showing
a very satisfactory increase in unit sales by 5 percent
so far this year and in profits, despite the c ontinuing
negative effects of the strong U.S. dollar.
Philip MorrisU.S.A. thanks largely to
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Marlboro is again doing better than the iddustry.
Whi.le the indwtry is off slightly in uiteits, we are
up. That increase plus price increases is helping
us achieve a higher level of incme.
you
Looking b4*ind the ligures, most of
are aware that in the domestic cigarette business,
the center of attention has beea pricing and genetics.
Cigarette price competition has been largely knknown
in the United States f or as long as all of us can re-
oiersber, but itx s something that we have lived with in
most of our markets around the world. We pr-obabiy are
as well-versed in price compatiti on as any consumer goods
corporation and we think we know how to handle it.
At the moment, we don't see any need t o
cut our prices in the United States or to enter the 1 oa
price segments. First of all,we know our brands are
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stronger than our competitor's. They tend to appeal to
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Secondly, we don't see generics at the mo-
ment gaining much more than their current share which is
rogghly 4 to 5 percent of the totall market.
Of course, if our assumptions are wrong,
and the low-priced products of our competitors should
start to move up and hrt our grcarth, or to put it another
way, if we felt we couidntt grow without entering the loW-
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priced market and obviously we woW enter and we are
ready to do so.
Overall as I have said, the current ~
trend in cigarette sales in the United States is slightly
dawn. ?aaatim and price increases hove had their ic,-
pacts. But another trend is that the move to ultra-
low-tar cigarettes has flattened out. Sanokers are return-
ing to taste and one reason Marlboro is doing so well is
that smokers aeb it as the good-tasting cigarette.
As you know, we always have some products
in test. We've introduced Marlboro 25's in spokane and
Indianapolis add we're moving into Hartford and Atlanta
this month, two additional test markets. This is a
line extension for Marlboro. In other w ords, it's a
different kind of pack, with each stick fully priced.
It's not a price proposition. By providing a conveniencedto
smokers who use more than a pack a day, we hope to strengthen
brand loyalty and get people who don't smoke Marlboro to
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switch. The results of this test do far
aging - test market.
are very eni our-
We have other products in test here including
Virginia Slims Ovals and we will be out in the msrket with
at least one other new products bef are the end of the
}Teare
Elsewhere in the woxtd, in England cce're
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hating very gaud success with the intrxuctit-m of
&aftles, a V;Lrginia cigarette in 100 milimetar seguient
that has a pack similar to the one used here for Players,~
After reaching nearly a 6 percent share in the London
market earlier this year, we launched Rafflea nationally
in the U.K. this cnunth.
In Australia,.we extended our Peter
Jackson brand into packings of 30 cxgarettes, That's
in a market W}+ere 25's were already very popular. And
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si nce then the
brand has d uuhad
Its roarketshare to 12
percent. And revereeci Philip Morris * weralL marketshara
decline in Auetralia.
Everyone of our opera ting cs u:.panies haq
i7ti1¢'r inilJval:itnlij in the [4o,iSs. That inc.''.l;ldes a[lar;?fiy
L.q,., iw-aicuhol beer ior MilIar which is in te:,t ~~31-
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ket as of last' month.
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0' The sales and earnings of Philip Morris
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20 w e,;~en~t universally approve of ai1 that wc~ d:~ ;nti cr~ake.
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21 'z T believe tna t a s a c cxmpany, we ar e wel I-
22 respected, I've already thanked George Yjei.ssman and Qoe
23 C=slffsan ro_ making my part so easy. Bease nuw accept rry
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11 thanks to yuu, all (i; you in corpu:ation aziaars. icA.tq aC
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Pd ayed abig role. k')u can ar,d must pj.ay {.?vi: 'inu:'.r ;
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positive role in molding tbe corporation in keeping
our reputation high.
What we say we ara, whgt you say we
are, and what we say we mean influence the way we ac-
tually are and what we actually mean. This can help
make us a better and more successful enterprise. And
it's imporrtant to everyone we deal with from empbyees,
communities, to customers. You can and should play a
positive role in activities such as opening and expand-.
ing our markets. The cuopeation of PM International and
our Washington office helped to open up the Japanese
market more for us this last year or two.
Nua wesre working and focusing on new
aQaLkets which have been closed to us like South Korea
~ and TaT~aan,
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(play a vital, defensive rule in defeating regulation and
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legislation that can hurt in the marketplace and reduce
our ability tu do business,
A year or so ago at a Public Affairs Meet-
ing we had at International, our industry I compared, I
was speaking of the cigarette industry, but as Stan says
all our industries are to some extent under attack, I
cumpared the cigarette industry to a house that had a
fire burning in it and that fire had already consumed
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part of our industries, takmn the groeth in the cigar-
ette industry already. And tl>tat.fire is beiag fanned
by people who are well-meaning in their dwn sense, but
really opposed to us and determined to do what they can
to put us out of busisess in the cs#garette business.
The point about the fire,analogy is that
there is not a fire brigade that we can call. We have
to deal with it ourselves. Only us who are going to be
able to do it and that means s11 of us.
Another responsibility of corporate af-
fairs includes mobilizing all of the available resources
that defend our industries in Philip Morris itself. Those
resources include all of managewents. You shouldntt feel
it ta 7ust up to you in the front rows of the trenches on
corporate and public affairs. Itls up to you to mobil-
ize the management, your managements and the managements
of all ofus. All of us areaready to do it and we just need
toauoperate and to work together to the beat possible
advantage.
Y ou also are the people with the skills
that let the world know that Philip Morris is a socially-
responsible company, a company pledged to theeconomic
health and progress of its tvase ccanounitiee under the
national and world econonies. A company which both prea-
ches and practices affirmative action, equal opportunity,
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