Old habits die hard

Here's an interesting fact: none of the managing directors of the Republic's big three tobacco companies smokes cigarettes

Here's an interesting fact: none of the managing directors of the Republic's big three tobacco companies smokes cigarettes. Their public face, Flor O'Mahony, mentions casually that he's a smoker, but when asked how many, says the question is "too personal".

The powerful European tobacco lobbyist, Brendan Halligan, is on record in the 1970s as a non-smoker. Still, his company, Consultants in Public Affairs (CIPA), has just completed more than a decade of service to the Confederation of European Community Cigarette Manufacturers (CECCM).

Coincidentally, both he and Flor O'Mahony are former secretaries general of the Labour party and senators. O'Mahony, once an adviser to a Minister for Health, Brendan Corish, describes his work for the Irish Tobacco Manufacturers Advisory Committee (ITMAC) - which shares an office building with CIPA on Baggot Street in Dublin - as part-time; he also teaches European Affairs and is a member of the prestigious Institute of European Affairs. Halligan has been chairman of the same institute - a body which prides itself on its independence from all political and social groups - since its foundation in 1991. He declined an Irish Times offer to discuss his tobacco-lobbying work. You've come a long way, baby, as a notorious cigarette advert once put it; an industry once so brash is now so bashful, despite the old refrain that it's legal and pays its taxes. In the early 1990s, it was still de rigueur for industry leaders such as Laurence Crowley, chairman of Carroll's, and Don Carroll, his predecessor, to be photographed at public meetings with king-size cigarettes dangling from their faces. Managers and company reps sucked ostentatiously on their ciggies - even on the phone - and urban cowboys such as snooker player Alex Higgins were the industry pin-ups.

But that was then. Nowadays, Crowley and Carroll could be arrested for smoking in the wrong public space; Higgins - ravaged by throat cancer - has turned anti-tobacco crusader; half a dozen Irish lawyers acting for more than 1,300 ill or bereaved clients are assembling legal partners and warchests to take on the tobacco companies; and in a week's time, tobacco advertising faces a total ban in the Republic.

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The battlelines are drawn as never before. The compelling Shatter Report on Health and Smoking - based on hearings by the all-party Committee on Health and Children - laid down the gauntlet. Minister for Health Micheal Martin (who "tried to smoke once and coughed a lot and that was the end of it") has declared war: "The game is up . . . We're watching our people die slow, long deaths. The tobacco companies knew what they were doing. They deliberately created a product that was addictive. They lied. They denied it was addictive when it was. They deliberately marketed towards children to get them hooked early on in life . . ."

His zealotry has a match in Tom Power, chief executive-designate of the Government's new Office of Tobacco Control and the man responsible for driving policy which could yet see cigarettes banned from public display and nicotine replacement therapy available on the public health. The Minister also lends an ear to people such as Dr Luke Clancy, the life-long anti-tobacco crusader, and Dr Fenton Howell, Dr Clancy's successor at ASH Ireland, who became a crusader when he entered a hospital ward as an intern and found "six patients with only four legs between them, all because of smoking and - this is the amazing thing - all of them still smoking".

But the final whammy could turn out to be the State's legal action against the industry to recover the tens of millions spent annually on the treatment of tobacco-related illnesses. What are the chances? "There's been a lot of hype about it; it's just too early to say," says the Minister for Health. "But the Joint Committee has been given powers of compellability and discovery regarding the tobacco companies so we'll see what they unearth." Is he optimistic? "I am, yes."

And the ripples are spreading. The VHI is also known to have considered similar proceedings (while still loading the non-smoker with the same premium as the three -pack-a-day man). As for BUPA, the State's other private health insurer, well, its chairman turns out also to be chairman of Gallaher (Dublin), the biggest Irish player in an industry that kills up to 7,000 Irish people every year and hospitalises another 2,000. Isn't that a bit odd? BUPA's response, in short, is that as a non-executive chairman, Dr Margaret Downes "is not involved in the day-to-day operations or decision-making of the company".

The fact that such questions are being posed at all suggests a radical turnaround in traditional attitudes towards smoking. To get a sense of just how radical, try to guess the source of the following statement: "There is an overwhelming medical and scientific consensus that cigarette smoking causes lung cancer, heart disease, emphysema and other serious diseases in smokers . . . There is no `safe' cigarette . . . Cigarette smoking is addictive, as that term is most commonly used today . . . "

So who said it - ASH Ireland? The Cancer Society? Nope. Click to the website of Philip Morris, owner of the world's largest and most profitable tobacco company, and see the Marlboro Man sweat. That startling admission suddenly appeared on its website on October 14th, 1999, the day the tobacco giant dramatically overrode its every public utterance over 50 years.

But its Irish distributor, John Player, is undaunted. Just as the industry prepares to go "dark" and those bizarre adverts disappear forever from the State, the company is sinking £150,000 into the launch of a new cigarette in a patented box with cute rounded corners, into a market already bursting with nearly 60 brands. Expect Carrolls and Gallahers to embark on a similar final push. There's still a lot to fight for; the Irish market alone is worth more than a billion pounds.

That old never-say-die spirit of the industry should not be under-estimated. Internal documents flushed out by US litigation have exposed the blatant lying, manipulation and industry-wide conspiracy that went into sowing and maintaining social ambivalence around tobacco-related health issues for nearly 50 years.

Further, they exposed the deliberate preying on what RJ Reynolds (represented here by Carrolls and John Player) used to call "pre-smokers" and "learners" - also known as children. All of which led to the $206 billion Master Settlement between US cigarette manufacturers and 50 US states in 1998.

Although the US debacle did not involve European players such as Gallahers (parent of Gallaher Dublin) or Imperial (which owns John Player), the industry's global reach and united battle strategy means that documents relating to the likes of RJ Reynolds, Philip Morris and BAT/Rothmans (owners of Carrolls) inevitably also throw up insights into the European tobacco industry. Under the CECCM, which operated out of Ballsbridge at one stage, national member organisations from all over Europe, such as Flor O'Mahony's ITMAC, along with individual representatives of Gallahers, BAT, Philip Morris, RJ Reynolds, Imperial and others, met regularly to consider strategy.

While public debate on environmental tobacco smoke (i.e. smoking in the workplace and in public places) was simmering in the early 1990s, minutes from CECCM meetings - now available on the Internet - reveal something about industry tactics, as well as the key involvement of Brendan Halligan. He attended the meetings, developed strategy, took "soundings" on tobacco-related issues among heavyweight European politicians and produced working papers on such topics as "How can we improve industry effectiveness?" and "The Right to Smoke" (the latter by the way, concluding that "pre-emptive action, particularly in the workplace, was primordial").

Between them, they discussed the "use of humour . . . use of ridicule . . . the creation of an intellectual environment which predisposes the scientific community to re-examine the science of ETS (environmental tobacco smoke)". This would require the establishment of European networks of "reputable scientists" and "smoking journalists" to be used in the context of a " ` soft science, hard public relations' series of actions . . ."

Such services don't come free, of course, so there was talk of "part-funding" for the scientists' network, and "modest" funding for the smoking journalists. Sadly, what constitutes "modest" in the tobacco world - or, indeed, a "smoking journalist" - is not elaborated upon here. But the result was manifest in examples of clever, snide journalism, the jibes about the "Nanny State", the contrived arguments about the denial of civil rights and freedom of choice.

The lengths to which Philip Morris for one, was prepared to go to defend its turf, were spelt out by a Finnish journalist, Emily Von Sydow. Although already represented in Brussels by both a 14-strong pressure group and a glossy think-tank led by former senior journalists, this was nowhere near enough for any given big occasion. Leading up to one crucial Commission decision, Philip Morris alone had assigned two lobbyists to each of the 20 commissioners and brought in an additional 40 lawyers.

Back home in 1994, Flor O'Mahony was busy too. A CECCM minute noted his plans to contact both the Minister for Health and Commissioner Padraig Flynn in advance of an Irish Cancer Society conference on environmental tobacco smoke. The objective? To "try and discredit" the US EPA's environmental risk assessment report. Within months, the CECCM's chairman was able to report that O'Mahony had "succeeded in establishing an effective coalition between employers and trade unions in Ireland, which had averted legislation at the workplace".

O'Mahony says he cannot discuss litigation issues because ITMAC "is just a trade association"; so the current line is that the Irish tobacco tax regime is the second highest in the EU and the third highest in the world; that with further price increases, smuggling could re-assert itself. Asked for a spokesman within industry to discuss litigation etc, he could only propose the Surrey-based head of corporate affairs for Gallaher Group plc, Ian Birks.

Birks fits the bill, a man prepared to defend his company's honour and transparency for hours on end.

It was Birks who, when asked repeatedly by the Joint Oireachtas Committee hearings if he believed that smoking was addictive, replied that he did not; there was much "confusion" about the term, he remarked, and it had even been used to describe people's craving for sweets and for browsing the Internet. "People can choose to smoke and they can choose to give up smoking, as millions do." What Philip Morris now admits to be addictive (albeit with the qualifying words ". . . as that term is most commonly used today"), Gallaher still refers to as a "habit".

As for lung cancer, Birks says that while "common sense" points to tobacco as a factor, no one anywhere has proved actual causation. He even rejects Gallaher's own 1970 review of the famous Auerbach "smoking beagles" research. This concluded that "Auerbach's work proves beyond all reasonable doubt the causation of lung cancer by smoke". To most reasonable people, this would be a clincher; not Birks. He claims no one has ever managed to replicate those findings despite "many" attempts; therefore the research and Gallaher's own verdict on it are meaningless. In fact, in Birks's view, all the beagle evidence serves to prove is that there was "real debate going on at that time and before that" about the effects of cigarette smoking. Ergo, smokers were well aware of the hazards every time they pulled on a cigarette, as long ago as 1970 and before.

To the same end, the Gallaher website draws exhaustive attention to the many media and medical warnings about the health and addiction risks in smoking down the centuries, going right back to King James I in 1604, moving on to the famous Doll and Hill study which reported an association between smoking and lung cancer as far back as 1950, followed by a Daily Mail headline in 1957 which screamed: "Heavy smokers warned: Cigarettes will kill 1 in 8". Then there was the 1964 article in the Times in which a Swedish Nobel Prize winner, Prof Hugo Theorell, stated baldly that "it was to get nicotine that people - including himself - were smoking". QED: people knew even then that smoking was a killer and was addictive. So to sum up: ordinary people knew - or should have known - all along, something that Gallaher itself still denies.

To anyone who still believes that to kill yourself smoking is a matter of free choice, it's riveting stuff. On this evidence, smokers must have known precisely what they were doing when they picked up a pack or three - until you consider those inconvenient US documents which demonstrate a conspiracy to suppress or muddy the facts about the addictiveness of its products, about the dangers to health, about the hazards of passive smoking, about the skewing of its marketing and flavourings towards children, who could never be said to have informed choice. And that is the issue, says Minister for Health, Micheal Martin: "From a layperson's view observing events in America, the key element to me is the addictive content in tobacco - about which information was withheld from the public."

The trick for the European industry, therefore, is to distance itself from its disgraced US counterpart (which was adjudged by at least one court to have engaged in "fraudulent conspiracy for 50 years"). To achieve this, it points to the gulf between the tax and regulatory environments in the two regions. "Don't base your judgment on what happened in the US," says Birks. "The suggestion that we're all the same is a nonsense . . . Take one example from that [Shatter] report: the committee wouldn't even acknowledge that 99 per cent of our products in Ireland do not contain the additives (i.e. sweeteners) that are supposed to make cigarettes more attractive to children"

Anyway, Gallaher's is about to do something that in the context of industry omerta is fairly startling. Later this year, it will voluntarily release onto the Internet more than half a million documents dating from the 1950s on. "This is because we don't believe we have anything to hide in our past," says Birks. "This way, anyone who wants to do so can get into the company's thinking and judge us on what was really going on here and not from edited highlights of documents in the US." Cynics would argue that they're jumping before being pushed by one parliamentary committee or another. But that's the kind of comment that merely provokes expressions of injured innocence from the industry and the conclusion that it just can't win.

So who will select these documents? "These documents will cover research and development meetings, corporate affairs . . . everything you would get if you were to say `find for us those documents to which a plaintiff's lawyers would be entitled in smoking litigation'."

Meanwhile, Birks agrees that "potential litigation is always going to be of concern". Writs have been issued from about 120 "would-be" Irish claimants he says, and more than 50 of those writs have been served. But, he says, "in not one case has a statement of claim been presented".

The two main Irish solicitors concerned agree that it is a tediously slow process. "It's new litigation, it will probably result in the development of new law and new procedural law as well," says Hugh Ward of Ward & Fitzpatrick. "The best case we have - which meets the ideal criteria [i.e. where the smoking-related illness was diagnosed within the Statute of Limitations, and the plaintiff smoked just one brand and had started before the health warnings appeared on the pack] - probably won't get into court within two years. So it's slow, but it's getting easier as the days go on." He is referring to the admissions by Philip Morris as well as the new powers of discovery and compellability of industry witnesses available to the Joint Oireachtas Committee when it resumes hearings.

The other solicitor, Peter McDonnell, is taking 205 cases which, he says definitively, are "provable", although only half fall within the Statute of Limitations. He is confident the law can be changed to accommodate the other half.

Privately, some industry observers fear for these small firms taking on Big Tobacco, an industry famous for "making you spend your own money". "They'll burn the small firms. Look for discovery of documents and a 40-foot truck will appear," said one. "They'll have 20 to 30 clerks to work on them while you're effectively on your own." Both Ward and McDonnell have forged links with US firms prominent in similar litigation. Hugh Ward reckons that to fight a precedent case like this will cost £1 million. Equally, Peter McDonnell seems under no illusions: "It's not just David versus Goliath; it's an army of Goliaths versus David's younger sister. This is nothing new to them, they've been doing it for five decades. They begin by retaining the biggest counsel in the country and the biggest law firms, so that they are then `conflicted out' and not available to the other side. The tactic is to build a wall of flesh - lawyers, accountants, medical people, scientists - between themselves and the litigants."

A victory for the State or individual litigants could produce something even more durable than cash. Since the 1998 Master Settlement in the US and the surrounding publicity, cigarette smoking there has fallen so precipitously that it is now approaching rates not seen since the second World War. Here, by contrast, it's on the rise again; up from a low of 28 per cent in 1994 to 31 per cent in 1999.

So is the industry petrified? Not likely. The blase, upbeat language of research credit reports on the European industry suggests that it has little to worry about, either from litigation or falling demand. Steadily declining sales in "mature markets" such as the US, Western Europe and Japan, are being offset by increased sales in developing markets. This - surprise, surprise - is being driven by "positive demographics"; for example, a substantially higher percentage of the population in non-traditional markets, such as Indonesia, is young.

The industry can also look forward to these "non-traditional" markets - where smoking is largely a male preserve - going the way of our own, where the genders are now neck and neck in their consumption.

As for litigation fears, the word is that the cost of the US Master Settlement to the industry has meant no more than about 45 cents on a pack of cigarettes there - and that the market can take it.

But the biggest threat to the industry generally is the on-going Engle case in Florida, a class-action in which the plaintiffs have cleared the first hurdle by persuading a jury that the industry conspired to hide the health effects of smoking. This is potentially explosive given that the case could encompass as many as 300,000 members claiming $100 billion in damages. The industry is resting its hopes on the possibility that such a huge "class" can't possibly be certified. And even if it is, the industry could lodge appeals until the end of time.

In the meantime, individual verdicts such as the Whitely case taken in San Francisco against Philip Morris and RJ Reynolds - involving a three-pack-a-day woman who began smoking after warnings had appeared on the packs - have also put the wind up the industry. If someone such as her can persuade a jury to award $50 million in punitive damages, then anyone can. But Philip Morris has deep pockets. Its 1999 operating income came to about $15 billion, of which nearly a third came from US tobacco operations alone. Robust cash-flow and stratospheric operating margins by any standard mean that the industry is well equipped for a long war.

But then there's the US government federal suit to worry about . . .

As for Europe, the only yardstick so far is a case against Gallaher and Imperial Tobacco in the UK, which collapsed in March 1999 and was claimed as a famous victory by the companies. The mundane truth, however, is that it fell mainly on the grounds that the Statute of Limitations had run out for many of the plaintiffs.

As far as the anti-tobacco lobby is concerned, any activity that exposes the industry to scrutiny has to be good for the cause. "As we get more transparency about the industry, the public will become more aware of being duped," says one observer. "As litigation by individuals proceeds, it smashes that cosy sense of collusion that the industry managed to weave into its relationship with its consumers; it was the industry and them against the rest of us. But the US disclosures reveal a lot of anti-social practice and that has driven a wedge between the industry and the smokers they once had on side . . ." Nothing splits friendships quicker than a sense of having been duped and lied to.

Meanwhile, in the face of stagnant growth in the West, the global industry is moving on, bringing its dazzling advertising budgets, glamorous role models and hidden seduction techniques to the hapless "pre-smokers" and "learners" of the former Soviet states, Asia and the Third World (which now has eight smokers for every one smoker in the West). So have advertising bans, regulation and punitive taxation regimes finally shifted them? Not likely.

As recently as 1997, the New Zealand government discovered that cigarettes marketed there had nearly twice the level of nicotine of those marketed in the US. Not only that, but cigarettes in 10-packs (mostly bought by the young for obvious reasons) consistently had higher nicotine levels than those in 20 packs. Old habits die hard . . .