RJR WENT AFTER TEENS

On the record: Firm targeted ads, surveys at smokers as young as 14 over
25-year period, memos show.

Mercury News Wire Services - Despite repeated public denials, R.J. Reynolds
Tobacco Co., the second-leading U.S. cigarette manufacturer, targeted
teenage smokers as young as 14 in an attempt to regain market share during
the past 25 years, according to internal company documents released
Wednesday.

As recently as 1988, for example, R.J. Reynolds planned to saturate areas
where young people gathered, such as fast-food restaurants, video game
arcades, and outdoor basketball courts, with billboards and posters
promoting its products, one memorandum shows. Other documents among the
papers written from the 1950s to the '80s emphasized that the company
sought to expand sales of its products among underage smokers, including
those age 14, in order to sustain brand popularity and corporate earnings.

``To ensure increased and longer-term growth for Camel filter,'' one
internal 1975 company memorandum stated, ``the brand must increase its
share penetration among the 14-24 age group, which have a new set of more
liberal values and which represent tomorrow's cigarette business.''

These are not the first documents to suggest that Reynolds and other
tobacco companies sought to court youthful smokers. But the documents made
public Wednesday are among the most explicit to have been released.

Reynolds continued to deny that it has targeted underage smokers and said
the documents were being taken out of context.

The documents were released by Rep. Henry Waxman, D-Los Angeles, a longtime
industry critic. He got the papers from attorneys in California who
obtained them from RJR in a case -- settled last September -- that accused
the company of using deceptive marketing practices, including youth
targeting, in its highly successful Joe Camel campaign.

Impact on Congress

The papers are certain to reverberate in Congress, which is considering
whether to adopt a $368.5 billion national tobacco litigation settlement
the industry reached with state attorneys general last June.

The documents also are likely to have an impact on the Justice Department's
criminal investigation of the industry and numerous lawsuits against the
cigarette companies, including Minnesota's massive suit against the
industry, which is scheduled to start next week.

Both Waxman and David A. Kessler, the former commissioner of the Food and
Drug Administration, said the new documents represented the strongest proof
to date that the cigarette industry targeted minors after studying them in
depth.

``If you're looking for a smoking gun on youth targeting, you need look no
further than these documents,'' said Kessler, who is now dean of the Yale
University Medical School.

``It's very hard to read these documents and then say that the industry
should get any special legal protections from Congress,'' Kessler said. The
industry's key legislative goal this year is to obtain congressional
ratification of the national litigation settlement, which would prohibit
all future class-action suits and punitive damages against the cigarette
companies.

The papers also may intensify the Justice Department's investigation of
whether cigarette officials misled the government about the nature of their
products and industry marketing practices.

Waxman said he would send the material to Attorney General Janet Reno and
ask her to broaden the Justice Department probe, including whether former
RJR President James W. Johnston lied to Congress in testimony to a House
subcommittee on April 14, 1994.

On that day, Johnston testified that ``we do not market to children and
will not.'' He also testified that ``we do not survey anyone under the age
of 18.''

Johnston, who resigned as chief executive of RJR's worldwide tobacco
operations in June 1996, did not return calls seeking comment Wednesday.

The memos clearly reflect deep concern at RJR about competitors Philip
Morris and Brown & Williamson showing ``unusual strength among these
younger smokers,'' which ``suggests continued growth for Philip Morris and
B&W as their smokers mature.''

On the other hand, the memo notes that RJR's two major brands, Winston and
Salem, ``show comparative weakness . . . among these young smokers.''
Tucker goes on to say that the company's market share will erode ``unless
this situation is corrected.''

Additionally, a 1973 marketing memo states that the company should use
comic strips to help entice ``younger smokers'' away from Philip Morris'
Marlboro, which had become the leading teenage brand. That document
described ``younger smokers'' as 14 to 24.

In another instance, RJR commissioned a ``Smokers Screening Profile,''
which surveyed the smoking habits of more than 11,000 teenagers, age 14 to
17, including data on their brand of cigarette, cigarette purchasing
habits, age, sex, religion, residence, household income, education and
occupation of parents.

Reynolds issued a formal statement, saying the documents were being
misconstrued. For example, the company asserted that the 1987 document
contained a typographical error and that, in reality, the memo should have
said ``18-24-year-old male Marlboro smokers.''

The company reiterated its long-standing position that it does not target
teenagers.

``Not only is it unfair to the employees of Reynolds Tobacco to strip these
documents from the context and perspective of the broad company record as
well as the social standards of the times in which they were created, it is
unfair to the American people and serves only the agenda of some who seek
to benefit from a broad misperception of how this company has conducted
this business,'' the company said in a statement.

Joe Camel case

Additionally, Reynolds said a small number of documents had been
``cherry-picked'' from about 100,000 produced in the Joe Camel case in San
Francisco. The company also said it had turned over all these documents to
the Federal Trade Commission.

Last May, the FTC charged that Reynolds' highly successful Joe Camel
campaign illegally induced children and adolescents to smoke. By a 3-2
vote, the commission asked an administrative law judge to issue a cease and
desist order to prevent RJR from using the cartoon camel in ways that
``would have a substantial appeal to children and adolescents below the age
of 18.''

Reynolds said it would vigorously challenge the FTC's order.

However, less than a month later, RJR and the nation's other leading
cigarette manufacturers reached the litigation settlement with state
attorneys general that included a term barring the use of cartoon
characters such as Joe Camel in future industry marketing.

Even though that settlement is still pending in Congress, Reynolds
announced in July that it was retiring the hip dromedary. At the time,
company officials said they were looking for a new advertising strategy.