(Continued)
Proposal 4 – Stop Youth-Oriented Ad Campaigns
Whereas, shareholder resolutions raised at this Company’s annual meetings in 1999, 2000 and 2001 asked that “before any promotional, marketing, and/or advertising campaign presently running is allowed to continue or is inaugurated in the future, it must be submitted to independent and certifiable testing to ensure that it is not equally or more appealing to the 14-to-18-age group than groups over 18.” The Board and Management urged shareholders to vote against these, arguing that it did not market to youth. In December, 1998, Philip Morris USA launched a national $100 million television campaign allegedly meant to persuade youth not to smoke. In various forms, it has continued this campaign ever since. Since then representatives of this resolution’s proponents repeatedly asked the Company to submit such ad campaigns to independent testing to see how youth are being impacted to (not) smoke our products. As recently as the 2007 AGM, Altria’s representatives refused, arguing its data shows the ads are “effective.” Yet is refused to release any peer-reviewed data supporting its claims. In contrast, a comprehensive University of Michigan peer-reviewed study on tobacco use and beliefs of 100,000 such ads during the period covered by most of the above resolutions (1999-2002) demonstrated that PM’s ads may have done more harm than good. The research covered the reach and frequency of tobacco company-sponsored ads and whether they were seen by 12-17-year olds in the largest 75 U.S. media markets, covering close to 80% of all households. This involved surveys of 8th, 10th and 12th graders in 48 states. The data showed no correlation between the frequency of the industry’s anti-smoking ads and actual or intended smoking by the teens. Melanie Wakefield of the Cancer Council Victor, Melbourne, Australia, a lead researcher on the project declared: “This research provides the clearest evidence to date that tobacco-sponsored ads don’t work.” A key element of the study, published in the December, 2006 American Journal of Public Health stated that eighth-graders likely to have seen the ads targeted at parents were more likely to believe smoking’s dangers had been exaggerated and more likely to say they planned to smoke. Older teens also expressed stronger approval of smoking and were more likely to have smoked in the 30 days before the school survey. The Company has not challenged the findings of this peer-reviewed study. Such data about that period belies the Company’s statements that its private research shows that its campaigns vis-á-vis youth and (non)smoking are “effective.” RESOLVED: Shareholders request the Board to stop within one week of the 2008 annual meeting all Company-sponsored “campaigns” allegedly oriented to inform youth about smoking’s dangers and/or prevent youth from smoking because of its dangers unless management can produce peer-reviewed data refuting contrary findings such as those above showing this Company’s campaigns geared to minors are ineffective in reducing teen smoking. Supporting Statement: This resolution’s sponsors believe this Company’s monies spent on youth tobacco-use prevention should be given those campaigns that have been demonstrated to reduce it. 
The Board recommends a vote AGAINST this proposal.
This proposal is substantively identical to a proposal rejected by nearly 97% of the stockholders last year. Youth smoking prevention is a complex issue for which there is not one simple solution. PM USA believes that kids should not smoke and that preventing youth smoking should be a vital and central component of comprehensive tobacco regulation. While the issue of youth smoking must be addressed by governments, regulators, parents, teachers, and society in general, PM USA continues to believe it has a role to play in addressing the issue of youth smoking and that its programs are appropriate and responsible. In 1998, PM USA created a Youth Smoking Prevention (“YSP”) department with the goal of helping to prevent youth from smoking cigarettes. PM USA’s YSP department supports youth access prevention initiatives to help keep cigarettes out of kids’ hands, makes grants to youth-development organizations, produces tools and resources to help parents talk to their kids about not smoking, and develops and disseminates youth smoking prevention communications. PM USA’s work in youth smoking prevention is guided by an advisory board consisting of experts in relevant disciplines. PM USA’s parent-directed media campaign called “Talk. They’ll Listen.” – the subject of this proposal – ran from 1999 to 2007 to help prevent youth smoking. The television campaign was designed to encourage parents to stay involved in their kids’ lives and talk to their kids about not smoking. The campaign also complemented our other parent-directed communications. PM USA’s research strongly indicates that the “Talk. They’ll Listen.” television ads were effective at communicating clearly that parents should talk to their kids about not smoking. The research also indicates that the ads were effective at generating these parent-child conversations about not smoking. For example, a December 2006 quantitative study of more than 1,000 parents of kids 10-17 years of age indicated that 60% of parents were aware of at least one of the television ads, and of those who were aware, 54% had a conversation with their child about not smoking. While parents were the intended audience of the “Talk. They’ll Listen.” campaign, PM USA recognized that there was the potential for adolescents to be exposed to the ads on television. As part of the research protocol, and prior to the airing of the ads, PM USA also talked with youth to identify and avoid unintended advertising message take-aways. Nothing in PM USA’s research raised the concerns indicated by the study published in the American Journal of Public Health and referenced in the shareholder proposal (“the Study”). PM USA believes the Study referenced in the shareholder proposal is flawed and erroneous and has communicated its disagreement to the Journal and others. Nevertheless, while PM USA intends to continue providing YSP parent resources including brochures and tip sheets through the online Parent Resource Center, PM USA’s “Talk. They’ll Listen.” youth smoking prevention television and radio advertising campaign ended in 2007. For these reasons, the Company believes this proposal is not warranted. Therefore, the Board urges stockholders to vote AGAINST this proposal, and proxies received by the Company will be so voted unless stockholders specify a contrary choice in their proxies. |