Philip Morris Reneged on Youth Policy, Critics Say

Health groups and public officials in several states have accused tobacco giant Philip Morris of retreating from its nationally advertised pledge to deny cash benefits to tobacco merchants caught illegally selling cigarettes to youths under 18.

Despite Philip Morris’ promise to withdraw merchandising benefits from retailers convicted of illegal sales to minors, the nation’s top cigarette maker has not punished a single dealer in the year since the plan was announced--even though at least four states have furnished names of dozens of convicted stores, said Minnesota Atty. Gen. Hubert H. Humphrey III.

“There are 400,000 tobacco sellers in the nation, studies show two-thirds sell to kids, and yet Philip Morris can’t find any tobacco dealers selling to kids,” Humphrey said in a news release this week.

“If anyone still thinks that the tobacco industry can be trusted, they should look at the pathetic grandstanding, foot dragging and finger pointing behind this public relations stunt,” he said.

A Philip Morris executive insisted the firm is committed to fighting youth smoking and will keep its promise to penalize retailers who break the law--but only after giving violators a warning and a second chance.

“The ultimate goal for all of us is to make sure retailers are complying with the law,” said Karen Daragan, spokeswoman for Philip Morris USA. “That’s the key--not punishing them.”

The dispute reflects a wider battle over how to combat tobacco sales to teens--the only age group in which people take up smoking in significant numbers. The Food and Drug Administration is proposing that tobacco products be classified as addictive and is calling for a wide range of restrictions on marketing to youth.

Tobacco firms, which are fiercely opposed to FDA regulation, have called instead for voluntary initiatives--such as that announced by Philip Morris--or less sweeping compromise legislation.

Philip Morris is the maker of Marlboro, the world’s top-selling cigarette brand and a favorite among teen smokers.

The company kicked off its “Action Against Access” program last June, proclaiming in full-page newspaper ads that “the best way to keep kids away from cigarettes is to keep cigarettes away from kids.”

The company announced a 10-point plan, including a vow to halt distribution of free samples and to refrain from distributing cigarettes through the mail. But the plan’s only teeth, tobacco critics claimed, was its promise to “deny merchandising benefits to retailers” convicted of selling cigarettes to minors.

Each year, tobacco firms dole out an estimated $1.5 billion in cash rebates to retailers who agree to promote sales of their brands through in-store signs and displays. For thousands of individual stores, these incentives amount to thousands of dollars per year.

Minnesota’s Humphrey--one of nine state attorneys general who have sued tobacco firms to recover tax funds used to treat smoking-related ailments--last fall sent Philip Morris a list of 15 Minnesota tobacco sellers who had been convicted of selling to minors after the program was announced.

A short time later, state officials in Oregon sent the names of 18 convicted stores, and Massachusetts authorities submitted several more, said officials in those states.

Moreover, the Washington state chapter of the American Lung Assn. sent a list of 150 retailers that the state’s liquor control board caught and fined for illegal tobacco sales between July 1 and Dec. 31, 1995.

Philip Morris’ initial response was to request additional documentation of the convictions and fines. The company has since informed the states that it will give violators a second chance before denying merchandising benefits.

Daragan said Philip Morris is sending violators a package of educational materials and a letter warning that a second violation will mean the loss of a month’s worth of merchandising benefits. A third conviction in a single year will mean the loss of four months’ worth of cash benefits, Daragan said.

She said the company is also offering a carrot with the stick. Retailers who sign a pledge and comply with the law will split an annual reward fund of $5 million, she said.

But critics said the company has backpedaled from its promise.

The firm’s refusal to sanction first-time offenders was “extremely disappointing,” said Jeffrey N. Kushner, director of Oregon’s office of Alcohol and Drug Abuse Programs, in a letter to the cigarette maker earlier this year.

If inspectors are required to “go back for a second inspection, then we are able to inspect fewer retailers,” Kushner wrote.

Nonetheless, Kushner said in an interview with The Times that three of the original violators have been caught a second time and will again be referred to Philip Morris.

“I’m going to give them the opportunity to prove that they’re true to their word,” Kushner said.

All states bar tobacco sales to youths under 18, but historically these have been among the most widely flouted laws in the country. Until recently, Utah and Minnesota were the only states where significant numbers of merchants were cited and fined for sales to minors.

That has changed in the wake of congressional legislation requiring states to enforce their laws or lose millions of dollars a year in federal grants for alcohol and drug abuse treatment.

In California, the measure has triggered a surge of compliance checks in which youths accompanied by plainclothes inspectors attempt to buy tobacco products.

Since they began Dec. 27, 1,105 compliance checks have been conducted, and 367--or a third--have resulted in illegal sales to minors. Fines collected to date amount to $42,750, according to figures provided by the California Department of Health Services.

Valerie Quinn, a program specialist with the department, said violators’ names have not been sent to Philip Morris.