
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, June 28, 1995                   TAG: 9506280051
SECTION: BUSINESS                    PAGE: B-6   EDITION: METRO 
SOURCE: Associated Press
DATELINE: NEW YORK                                LENGTH: Medium

YOUNG SMOKERS ON INDUSTRY HIT LIST

Philip Morris USA said Tuesday it would quit giving away cigarettes and would penalize merchants who sell them to minors, part of what the nation's biggest cigarette company called a major effort to curb underage smoking.

The maker of the best-selling Marlboro brand also said it would support legislation to license cigarette vendors and prevent youngsters from buying smokes at vending machines.

Philip Morris said the program reflected its concern about the tobacco industry's negative image caused by young people who smoke. Anti-smoking activists called the program an inadequate attempt that could make smoking even more enticing to youngsters.

James J. Morgan, president and chief executive of Philip Morris USA, said Philip Morris never has marketed cigarettes to youngsters but said ``the fact is there is a perception the industry is interested'' in doing so.

He said the new program should demonstrate Philip Morris' resolve to create ``a marketplace where minors cannot buy cigarettes.''

The tobacco company appointed former Sen. Warren Rudman of New Hampshire to audit its program and ensure compliance. State laws generally ban cigarette sales to people under 18.

The program comes as cigarette makers face unprecedented pressure over the health consequences of smoking. Pending lawsuits accuse the industry of manipulating nicotine levels and demand that it pay the health bills of patients afflicted by diseases blamed on tobacco smoke.

Federal regulators also have been examining whether new rules are needed to govern the tobacco industry. The Food and Drug Administration has been studying whether cigarettes should be regulated as a drug delivery device.

Industry watchers said Philip Morris is eager to reap some public good will at little cost by dramatizing what company officials say has been a longstanding corporate policy against marketing cigarettes to youngsters.

Philip Morris said it didn't know how many of its cigarettes are consumed by minors and said the potential for lost sales was not a factor in developing what it is calling the ``Action Against Access'' program.

Its ban on cigarette giveaways would cut distribution by about 25 million packs a year. That pales in comparison to its annual domestic sales of about 11 billion packs.

Roy Burry, tobacco industry analyst for Oppenheimer & Co., said other tobacco makers probably will follow Philip Morris' lead for fear of looking bad. ``They have to be socially acceptable or the product will be penalized and they don't want to be penalized,'' Burry said.

R.J. Reynolds Tobacco Co., the nation's second biggest tobacco company, has backed a program to discourage youngsters from smoking for five years and has been advertising it in recent days.

by CNB