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04/30/04 Altria CEO says smokers have a choice
Few shareholders vote for resolutions to cut health risks EAST HANOVER - Years of often-heated protests against Altria Group's giant tobacco business, rekindled at its annual meeting on Thursday, have barely registered with shareholders. None of the four resolutions tied to the health risks of smoking received more than 5 percent of their votes, while another concerning political contributions received only 7.1 percent. While executives admit that there are addictive and cancer-causing ingredients in cigarettes, they show no inclination to back away from the business. In response to shareholder Anne Morrow Daley, who came from Virginia to demand an apology for the high death rates among smokers, chairman and chief executive Louis Camilleri said, "Society has to make a choice. You clearly don't like this, but people clearly like to smoke and continue to like to smoke." Sharon Pratt Brown used part of her time at the microphone during the question period to observe a moment of silence on the birthday of her late father, who died 18 years ago at age 60 from lung cancer. "My father was never informed of the very addictive nature of our products," she said. Camilleri said, "I agree with the overwhelming scientific evidence that smoking is addictive. But that doesn't mean people can't quit." Still, subtle shifts have occurred within the company. Besides switching its name to Altria from Philip Morris Cos. early last year, a pre-meeting video was dominated by products of Kraft Foods even though cigarette brands, such as Marlboro, Parliament and L&M, account for three-fourths of the company's annual revenues. Altria owns 84.5 percent of Kraft. When Philip Morris formally announced its purchase of Nabisco Holdings four years ago, several executives puffed away at the rostrum. On Thursday, smokers had to watch the annual meeting in a special tent outside because the Kraft building is smoke-free. And after decades of holding its annual meeting at its sprawling cigarette plant adjacent to Route 95 in Richmond, Va., Altria switched to the more secluded Kraft campus, surrounded by a broad lawn, in East Hanover. Still, security was extraordinarily tight for a shareholders meeting. Passes were required to get past the guard tower, checkpoints were set up along the winding road to the Robert M. Schaeberle Technology Center, and there were metal detectors, X-ray machines and strict limits on what people could take into a meeting room. "This was definitely much lower-key than in past years," said Kathryn Mulvey, executive director of the Boston-based corporate activist group Infact. Typically, about 2,000 shareholders, many of them retirees, attended the meetings in Richmond. About 200 were there on Thursday. The one business-related question from a securities analyst sought information about a possible breakup of Altria, splitting Kraft away from the tobacco business. Until litigation in Illinois and with the U.S. Department of Justice is settled, any plans along that line would be "theoretical," Camilleri said. More typical among the speakers was Abraham Brody, one of several registered nurses who came to the meeting wearing white smocks and black armbands. "How can a socially responsible company sell products so excruciatingly deadly with ordinary use?" Camilleri earlier cited steps that the company has taken to discourage young people from smoking, to encourage health warnings on cigarette packs worldwide and to put health risk information on its Web site. "I know you will never agree (with us), so let us agree to disagree," he told Brody. Resolutions, sponsored by shareholders and activist groups and opposed by the company, included: More widely publicizing the risks of smoking for pregnant women. The Sisters of Charity of St. Elizabeth in Morris Township advocate wider dissemination of warnings to reach the poor and less-educated women, such as signs at cigarette stores. The company said it gives wide play to the issue and will await legislative action before going further. Creating a panel of outsiders to study the health risks of acetate fibers in filters. Altria said it has done extensive research on the subject. Dropping the "light" and "ultralight" labels on some brands as deceptively implying that they are healthier. It is accurate to use the terms to explain a lower tar yield or different flavor, Altria said. Placing large health warnings with pictures on cigarette packs, as is done in Canada. Altria advocated leaving the style and content of warnings to government bodies.
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