For decades the international tobacco industry has kept itself contained behind a dam of denial that its products were either addictive or disease inducing. A small hole was punched in that dam a few weeks ago when the relatively small Liggett Group manufacturers of such cigarette brands as Chesterfield and L&M admitted that its products were both addictive and harmful and reached a settlement with 22 American states which could grant the company immunity from further prosecution by those states. Now (as might have been predicted) the hole in the dam wall punched by Liggett has grown very significantly.
Within the past two days the world has learned that the two largest American tobacco companies Philip Morris, maker of Marlboro, and R J Reynolds, part of the Nabisco industrial empire have been in discussion with the attorneys general of six American states apparently in an effort to broker a similar deal to that negotiated by Liggett. Only three weeks ago they had greeted the Liggett settlement with denial, derision and denigration. It looks as if the various internal tobacco industry documents (which the industry attempted to have suppressed) which Liggett surrendered to State authorities as part of its settlement, did indeed contain some damning indictments.
The mere fact that the tobacco majors are now discussing settlement terms represents a further very substantial breach in their dam of denial. But the hole in the dam is not yet large enough for the full torrent of contrition to flow from within the industry. Indeed, Morris and RJR Nabisco probably see their current negotiations as an effort to block the hole created by Liggett, at least within the confines of their domestic American market. A domestic settlement of pending court cases within America would not affect their most rapidly expanding market which is outside the United States, and it is significant that their stocks had risen by about 10 percent in value within 12 hours of the news breaking that they were in discussions with the attorneys general.
Those discussions are far from concluded. There is talk of the setting up of a compensation fund which could pay out $300 billion over 25 years, (small enough for an industry that had revenue of $45 billion last year), and of very significant curtailment of the advertising and promotion of tobacco in the US. There is also talk of the Food and Drugs administration in Washington being given regulatory powers over tobacco products. The attorneys general and anti tobacco agencies could well press for greater reparation of the damage done by cigarettes. They might not get it. It could still be that the very many cases pending against the tobacco manufacturers will still have to go to court. But then there are those industry documents made available by Liggett which might influence the courts in favour of the plaintiffs.
Whatever the outcome of the current negotiations, the fact that they are actually taking place creates a defining moment in the history of the American tobacco industry. But, for the sake of the health of the rest of the world, there is still a war to be waged against the sale and promotion of tobacco outside the US, and the American industry will be a strong antagonist in that war. The hope must be that the original Liggett admissions and revelations will have a wider effect and that the breach in the dam will continue to widen.