Philip Morris International: Alternative Annual Report

Every year, one of the world’s best-known corporations provides its shareholders a glowing image of a company that is handsomely rewarding its shareholders by expanding into new markets, developing new products, and overcoming market and regulatory challenges.
The truth is that this corporation makes its billions of dollars in profits at the expense of people’s health and their lives. This report reveals the dark truth behind how Philip Morris International earns its profits.

Philip Morris International (PMI) is the world’s largest, deadliest and most profitable publicly traded transnational tobacco corporation. PMI currently operates in 180 countries and holds more than 27 percent of the international tobacco products market (excluding the People’s Republic of China and the United States). In 2010, PMI reported revenues (excluding taxes) of over US $27 billion and an operating income of US $11.2 billion. Another way to look at it: That’s $5,500 in profits for every person who has died so far this year from tobacco-related disease.

FINANCIAL LOWLIGHTS: THE PRICE PAID FOR PROFITS

PMI reported 11.6 percent growth in profits and an increase of 4.1 percent in its cigarette shipment volume in 2010. This increase in profits and volume contributes to:

  • One tobacco-related death every six seconds worldwide. That’s 5.4 million people every year.
  • Premature deaths. On average, smokers lose 15 years of life and up to half of all smokers will die of tobacco-related causes.
  • Higher healthcare costs and lost productivity. Tobacco causes a $500 billion global economic drain each year — nearly $74 for each person in the world.
  • For every dollar of PMI revenue, health care expenses and productivity loss cost the world economy $7.39.

To achieve these profits, PMI:

  • Spends nearly $5 on its so-called corporate social responsibility initiatives for every tobacco related death — a means of distracting attention from its core business of selling a harmful and deadly product.
  • Implements a range of tactics to undermine the success of public health policies that protect people from the harms of tobacco, including:
  • litigating, particularly by leveraging international trade agreements;
  • targeting women and children with deceptive advertising, promotion and sponsorships;
  • entering into strategic partnerships with governments;
  • establishing front groups; and
  • engaging in so-called corporate social responsibility initiatives.

2010 Alternative Annual Report: Executive Summary

At the annual shareholders’ meeting on May 11, 2011, Philip Morris International’s (PMI) executives and shareholders celebrated another year of growth in spite of the global economic crisis. CEO Louis Camilleri, however, did not mention the true cost of tobacco addiction: 5.4 million preventable deaths globally every year. As of May 11, 2011, close to 2,000,000 people have lost their lives to tobacco this year.

PMI’s 2010 Annual Report highlights its aggressive expansion into markets in Latin America, Eastern Europe, Africa and Asia, but it doesn’t reveal the fact that tobacco’s death toll will rise to eight million women, men and children a year by 2030 — with 80 percent of those deaths occurring in the regions it is destructively targeting. PMI’s Annual Report also paints a picture of itself as a charitable and socially responsible corporation, but the company’s charitable activities are really an attempt at gaining political and public goodwill and defeating efforts to reduce tobacco addiction, especially in the middle- and low-income countries where it is expanding most rapidly.

Every day, PMI undermines and directly interferes with implementation of the world’s first public health and corporate accountability treaty, the World Health Organization’s Framework Convention on Tobacco Control (WHO FCTC). To date, 171 countries and the European Union have ratified the treaty. Because of the tobacco industry’s need to maximize profits in spite of tremendous public health, economic and social costs, the treaty recognizes the fundamental conflict between the tobacco industry’s interests and health policy. In November 2010, the Parties to the WHO FCTC once again upheld this principle when they unanimously passed a resolution supporting Uruguay as it defends itself against PMI’s legal threats and its use of trade agreements to fight tobacco control. It is clear that the global community’s resolve to stand up to Big Tobacco is stronger than ever.

Worldwide support for the health policies endorsed in the treaty is increasing. As a result, tobacco industry opposition to tobacco control policies becomes more aggressive, making this a critical moment in global tobacco control. Tobacco control and corporate accountability advocates must remain vigilant in exposing and challenging the ever-evolving tactics of the tobacco industry.
This Alternative Annual Report is a compilation of stories that illustrate the lengths to which PMI will go to line its coffers, even at the potential cost of one billion lives in this century. It details PMI’s multiple strategies to intimidate countries and circumvent government health policies. Communities organizing to stand up against PMI stretch to every corner of the globe. Their refrain is the same: We need to strengthen the global movement to put people and public health ahead of tobacco industry profits. The time to act is now.

PM2010

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