Return
to Story Page
To print: Select File and then Print from your
browser's menu
Suein L. Hwang
New York, July 6: In the wake of two surprise courtroom losses in the US that have sent its stock reeling, Philip Morris Cos. Chief Executive Geoffrey Bible tackled Wall Street's tobacco liability worries head-on, saying the company is already taking "immense" steps to repair its tarnished image and manage its litigation risks.
Speaking to a large gathering of analysts and investors, Bible vowed that the world's largest cigarette maker would be "more visible, accessible and responsive."
Murray Bring, vice-chairman and general counsel, referred to the courtroom losses in California and Oregon, saying the company is planning "to make significant changes in our litigation strategy to address juror anger." He didn't provide specifics. Bring said the company also plans to use its recent settlement of state Medicaid lawsuits in the courtroom as an argument against large damage awards.
Acknowledging that the series of attacks on the industry in recent years has left it with a serious image problem, StevenParrish, senior vice-president of corporate affairs, said that in the next few months the company will adopt "a far more visible profile" than it has in recent years.
The company plans to focus its public messages on efforts to stop youth smoking, its charitable contributions and the company's many non-tobacco businesses. Parrish even vowed to build bridges with anti-tobacco activists.
Bible dashed persistent rumours that Philip Morris might spin off its food and tobacco businesses, saying there is "no compelling evidence" that it is worthwhile to do so. He also said the company has no plans to sell its struggling Miller Brewing unit.
The heads of Philip Morris's operating units also provided projections of earnings over the next three years.
Kraft Foods expects volumes to grow between two per cent and three per cent this year and through 2001, while operating income should grow six per cent to seven per cent. Michael Szymanczyk, president of the US tobacco unit, said the cigarette market will remainin transition from recent settlement-driven price increases through the early part of next year, after which the division plans to deliver operating-income growth of four per cent to six per cent annually.
The international tobacco unit said that volume this year will decline four per cent and operating income will be flat. Miller Brewing said total volume this year will grow between one per cent and three per cent, helped by the acquisition of four new brands. Miller's operating income will jump 16 per cent to 18 per cent resulting from the acquisitions, productivity and strong pricing.
Krafts Foods International predicted 1999 volumes would be "up slightly" this year reflecting economic troubles in Russia and Brazil, while operating income is expected to be "flat to slightly positive."
The Asian Wall Street Journal
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
------------------------------------------------------------
This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
------------------------------------------------------------