MANUFACTURER ADMITS SMOKING KILLS

The largest cigarette manufacturer in the world has finally admitted that
smoking is addictive and causes lung cancer and other fatal diseases.

The confession, contained on a corporate website launched today, comes
after years of denying the health risks and in the wake of multi-million
dollar civil suits brought against tobacco companies.

Philip Morris now admits that smoking is "addictive as that term is most
commonly used today." It also accepts that there is an "overwhelming
medical and scientific consensus" that smoking cigarettes can lead to lung
cancer, emphysema and heart disease.

The remarkable "mea culpa" is part of a $100m corporate public relations
campaign which the manufacturers of Marlboro hope will protect them from
future civil actions. Two years ago, the big tobacco companies, including
Philip Morris, agreed to a $246bn settlement of actions brought by states
to recover the Medicaid costs of treating sick smokers.

"There is no 'safe' cigarette," the website warns. But it stops short of
accepting that non-smokers subjected to cigarette smoke may also be
affected by lung cancer and other diseases. However, smokers should avoid
smoking in the presence of children, warns the site.

On the delicate issue of addiction, the company acknowledges that "it can
be very difficult to quit smoking but this should not deter smokers who
want to quit from trying to do so." The Philip Morris site carries links to
other websites giving advice on how to stop. The tone of the website is in
marked contrast to the company's previous position, which was to deny that
cigarette smoking caused cancer and to attack the medical evidence put
forward by the US surgeon general.

Charitable Works

The campaign will also feature television commercials highlighting the
company's charitable works in the fields of domestic violence, hunger and
teenage smokers. The company says it gives away $75m-a-year to charities
and cultural events. Each commercial, which will be aired during television
sporting events, ends with the slogan: "Working to make a difference. The
people of Philip Morris."

The Campaign for Tobacco-Free Kids yesterday attacked the campaign. "It's a
brilliant public relations gesture designed to give Philip Morris cover to
avoid government regulation and to continue the Marlboro campaign which has
made it number one among our nation's children," said Mathew Myers.

In London, the anti-smoking group, Ash, called the company's admissions
cynical. "All they have done is admit what all respectable scientists were
saying 30 years ago and they want applause for that. They have spent
decades defending the indefensible."

Despite big anti-smoking campaigns, US teenagers are smoking in increasing
numbers. A recent poll showed that 35% of final year schoolchildren had
smoked in the past month, compared with 28% in 1992.

Steven Parrish, a senior vice-president of Philip Morris, which employs
144,000 people and markets it goods in more than 150 countries, denied that
the company had an ulterior motive and said: "This is a serious and good
faith effort to try to engage in a dialogue."

The campaign will be studied carefully by Philip Morris's rivals. Already
one company, Lorillard, which produces Newport cigarettes, is planning a
campaign against teenage smoking.

The moves are an indication of the fear among tobacco firms that the
government could take further measures against them unless they appear to
be acting responsibly. The industry spent $40m in a public relations
campaign last year to head off attempts to impose greater restrictions on
cigarette sales. Under federal law teenagers are not allowed to buy
cigarettes but the law is routinely ignored.

Last month, the justice department filed a law suit against the big tobacco
companies of conspiring since the 1950s to defraud and mislead the public
about the medical effects of smoking. President Clinton said at the time
that "the tobacco companies should answer to the taxpayers for their
actions" and the attorney general, Janet Reno, went further: "For the past
45 years the companies that manufacture and sell tobacco have waged an
intentional, coordinated campaign of fraud and deceit. It has been a
campaign designed to preserve their enormous profits whatever the cost in
human lives, human suffering and medical resources."

The tobacco companies are also aware of the changing public climate against
them. Cigarette advertisements were banned nationally on television and
radio in 1971.After they were also excluded from billboards and sports
stadiums, the manufacturers turned to newspapers but more and more, such as
the Los Angeles Times, which banned them last month, the New York Times and
the Seattle Times are turning them down.

Anti-smoking commercials and billboards have also been stepped up. One
poster shows a cowboy with a wilting cigarette in his mouth and the slogan
"smoking causes impotence". Commercials include the brother of the famous
Marlboro cowboy, who died from cancer, lamenting his family's loss and
describing his brother's dying days.