Crisis Management: A smouldering issue catches light in the US - By admitting liability and offering to pay compensation for its role in causing cancer, US tobacco company Liggett has created a PR headache for the rest of the industry

’Cigarette maker concedes smoking can cause cancer’. This New York Times headline, two weeks ago, is one the anti-smoking lobby has waited over 30 years to see.

’Cigarette maker concedes smoking can cause cancer’. This New York

Times headline, two weeks ago, is one the anti-smoking lobby has waited

over 30 years to see.



The startling admission by US cigarette company Liggett that tobacco

causes cancer sparked a flurry of media interest worldwide.



Bennett LeBow, head of Liggett’s parent firm The Brooke Group, made the

statement as part of a deal with 22 state attorneys who have been suing

the industry to recover the cost of treating the sufferers of

smoking-related diseases.



LeBow also agreed to pay litigants a quarter of his pre-tax profits for

the next 25 years and share legal defence documents with anti-tobacco

lawyers.



The response of the remaining tobacco giants - Philip Morris, RJ

Reynolds, Brown and Williamson and Lorillard - to their former ally was

swift. The top four players secured a restraining order preventing LeBow

from turning over defence documents and issued a joint press

statement.



Their PR tactic was to by-pass LeBow’s damaging comment that smoking

causes cancer - something tobacco firms still dispute - and focus

instead on discrediting their attacker.



The release noted that LeBow testified in a 1993 court case that he was

a ’two-to-three pack a day smoker for about 15 years’. At the time LeBow

claimed smoking was not addictive and he did not know if it caused

cancer.



LeBow was also labelled as an opportunist, ’brokering a deal’ in order

to force one of the other cigarette manufacturers to take over his

ailing company.



Liggett may be, as they claim, a one-off but the issue of paying off

claimants is posing a real and growing problem for the image of tobacco

companies in the States.



Philip Morris, RJ Reynolds and Brown and Williamson have been using the

PR company Bozell Sawyer Miller and two law firms for several months to

develop plans for a settlement of its legal and regulatory hassles,

although the PR agency denied it was involved in handling the Liggett

case.



Meanwhile, this side of the pond, tobacco companies have been sending

out similar messages in response to Liggett.



’Emotive rhetoric’ is how one top tobacco PR man summed up UK media

coverage of the issue. Again, their defence tactic revolved around

LeBow. ’This is all about money,’ he added. ’It has nothing to do with

morality and health.’



Others, like BAT investor relations manager Ralph Edmondson stressed it

is a US, not a UK issue and one which has practically been stubbed out

over here. ’There was some tension last week but it is becoming last

week’s story,’ Edmondson commented on the volume of media coverage.



Not surprisingly others, especially the anti-tobacco lobby see things

differently. ’It’s the beginning of the end for the tobacco industry,’

says former head of public communications at the Medical Research

Council Mary Rice. ’I think they are deeply concerned. In PR terms there

is not much they can do, they have been shown up as having lied.’



Pamela Taylor, who until recently was the chairman of the anti-smoking

pressure group ASH, also predicts troubles ahead for the tobacco

industry now one of them has broken away. ’What they have always done in

PR terms, which is despicable but effective, is to say there is a debate

over whether smoking causes cancer,’ says Taylor.



According to Taylor cigarette companies have always stuck together and

only responded to debate as a group. Although the legal systems differ

here, there are 23 cases pending. As details of the cases are heard, in

two years time, Taylor predicts the companies will abandon their

solidarity in a bid to save their own individual images.



Unlike Edmondson, Taylor views tobacco companies as global players which

will try to avoid any legal battles with a worldwide impact and predicts

a move into third world countries to avoid them. ’They can see threats

coming in on all sides,’ she explains. ’They are restricted in Canada,

the US and parts of Europe. In terms of promotions they will look to

third world countries like China for future markets.’



Crisis management expert Mike Regester says that the Liggett case has

been over-hyped but claims the tobacco giants are still ignoring a few

fundamental crisis rules.



’It is much better for industries to confront the potential risks

associated with their products and communicate their willingness to

manage this risk,’ says Regester, although he admits ’this is harder to

do with cigarettes’.



However he adds: ’It is ridiculous that they continue to pretend the

link between smoking and cancer has not been formally established.’



It is hard to say whether, in the light of Liggett, firms like BAT will

continue to employ scientists, lawyers and PR people to combat social

and medical arguments against smoking or step up the PR campaign for

’smokers’ rights’, a tactic used in the US where smokers’ are facing

increasing restrictions.



’The PR implications depend on where it ends up,’ says one tobacco

industry source referring to the Liggett case. ’This is only the

beginning. We have heard what LeBow has to say, and the financial

analysts have seen right through it. We will just have to wait for the

next move.’



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