Companies Look to the Future as Long-Running Federal Lawsuit Nears End

RICHMOND, Va.--()--Altria Group, Inc. (“Altria”) and Philip Morris USA, Inc. announced today that they and other companies have agreed on the timing of court-ordered communications about cigarettes and smoking on television and in newspapers. The communications, which will begin on November 26, 2017, stem from a 1999 lawsuit the federal government brought against the major domestic cigarette companies that focused on industry conduct dating back to the 1950s.

The court’s order requires the companies to publish five statements related to cigarette smoking across several communication channels, including newspaper and television ads, on the companies’ websites and on cigarette packs for a year or more.

“This industry has changed dramatically over the last twenty years, including becoming regulated by the FDA, which we supported,” said Murray Garnick, Altria’s Executive Vice President and General Counsel. “We’re focused on the future and, with FDA in place, working to develop less risky tobacco products.”

Today, tobacco is one of the most regulated industries in the country. The way in which cigarettes are manufactured, marketed and sold has changed markedly since the lawsuit was filed.

The 1998 tobacco settlement agreements with the state Attorneys General led to significant industry changes. For example, the settlement agreements banned cigarette billboards, stadium advertisements and brand-name merchandise.

Restrictions became more extensive in 2009 when Congress gave the U.S. Food and Drug Administration broad regulatory authority over nearly every aspect of tobacco product manufacturing and marketing.

“We remain committed to aligning our business practices with society’s expectations of a responsible company. This includes communicating openly about the health effects of our products, continuing to support cessation efforts, helping reduce underage tobacco use and developing potentially reduced-risk products,” added Garnick.

According to government data, underage cigarette smoking has declined to historical lows – falling from 28.3% in 1997 to 5.9 % in 2016.

Background on the Federal Government Lawsuit

In 1999, the United States government filed a lawsuit in the U.S. District Court for the District of Columbia against various cigarette manufacturers and their parent companies asserting claims under various federal statutes. The lawsuit sought to recover billions of dollars in health care costs for tobacco-related illnesses. The government also sought disgorgement of company profits and an injunction prohibiting certain actions by defendants.

The court eventually dismissed all of the government’s claims but one, and rejected the monetary penalties the government sought.

In August 2006, the court entered judgment in favor of the government on its remaining claim. The court issued findings related to the companies’ conduct and a permanent injunction that is in place today.

As part of the injunction, the court ordered the defendants to make certain “corrective statements” related to issues raised in the litigation. Since 2006, the parties have vigorously litigated aspects of the injunction, including the content of the corrective statements.

Altria’s Profile

Altria’s wholly-owned subsidiaries include Philip Morris USA Inc., U.S. Smokeless Tobacco Company LLC, John Middleton Co., Sherman Group Holdings, LLC and its subsidiaries, Nu Mark LLC, Ste. Michelle Wine Estates Ltd. and Philip Morris Capital Corporation. Altria holds an equity investment in Anheuser-Busch InBev SA/NV.

The brand portfolios of Altria’s tobacco operating companies include Marlboro®, Black & Mild®, Copenhagen®, Skoal®, MarkTen® and Green Smoke®. Ste. Michelle produces and markets premium wines sold under various labels, including Chateau Ste. Michelle®, Columbia Crest®, 14 Hands® and Stag’s Leap Wine Cellars, and it imports and markets Antinori®, Champagne Nicolas Feuillatte, Torres® and Villa Maria Estate products in the United States. Trademarks and service marks related to Altria referenced in this release are the property of Altria or its subsidiaries or are used with permission. More information about Altria is available at altria.com and on the Altria Investor app.

Contacts

Altria Client Services
Investor Relations
804-484-8222
or
Media Relations
804-484-8897

Contacts

Altria Client Services
Investor Relations
804-484-8222
or
Media Relations
804-484-8897