Company Supports Federal Regulation of Cigarettes

NEW YORK--(BUSINESS WIRE)--May 30, 2003-- A study conducted by the Centers for Disease Control found higher levels of tobacco specific nitrosamines (TSNAs) in Marlboro cigarettes sold around the world from 1999-2001 compared to cigarettes manufactured by local companies in other countries. The higher levels of TSNAs found in most domestic cigarettes is a result of the inclusion of U.S. grown tobacco. The study also found that the level of TSNAs in Marlboro is not significantly different from a comparison brand purchased in the United States. As the author of the study told the Washington Post, "It's not just Marlboros, but most American cigarettes that have these considerably higher levels of nitrosamines."

"Philip Morris USA has been actively addressing this issue for a number of years," said Mike Farriss, Vice President, Leaf. "While the study released on Thursday by the CDC was being conducted, the Company was working with farmers to find ways to address this issue which has resulted in the development of technology that significantly reduces the level of TSNAs in American grown tobacco."

In February 2000, Philip Morris USA joined the Flue-Cured Tobacco Cooperative Stabilization Corporation in establishing a $66 million fund by providing a grant of $35 million. This grant gave financial assistance to tobacco growers to return to the use of indirect heating systems with heat exchangers, which has been shown to reduce the occurrence of tobacco specific nitrosamines produced during the curing process. Philip Morris USA requires the use of indirect heating systems with heat exchangers as part of its contract with flue-cured tobacco growers. As a result of these efforts, the TSNA levels in the 2002 flue-cured crop were 80 - 90% lower than crops grown a few years earlier. The cigarettes tested in this study were made with tobacco grown before these improvements in leaf curing.

In addition, Philip Morris USA has been supporting research programs to lower the levels of TSNAs in the burley tobacco crop by improving seed varieties, agricultural practices, harvesting and storage.

As the study notes, "Levels of TSNAs also can vary within batches of flue-cured tobacco. The level of TSNAs in tobacco is affected by the amount of nitrate present during growing and curing. The use of direct-fire burners fueled by propane gas to flue-cure tobaccos began in the late 1960s and early 1970s (Fisher, 2000). These burners exhaust combustion gases directly into the tobacco-curing barn, exposing the curing tobacco to NOx gases that result from incomplete fuel combustion. These gases react with alkaloids in the tobacco to form TSNAs. Tobacco curing operations that do not expose the curing tobacco to exhaust gases (e.g., heat exchange curing methods) eliminate this source of TSNA formation. TSNAs also are found in burley tobacco; researchers believe that those TSNAs result from microbial reduction of nitrate to nitrite and other NOx compounds. Different blending and curing practices most likely are responsible for the variation in TSNA levels reported here."

While the Company has been working to reduce the levels of TSNAs in burley and flue-cured tobacco, it has also been focusing its product development efforts on achieving significant reductions in a number of constituents in cigarette smoke that the public health community has identified as harmful. Philip Morris USA agrees with the study's authors who state that "TSNAs are not the only carcinogens found in cigarette smoke, and reducing their levels alone does not guarantee a less hazardous cigarette. All sources of risk and factors altering risk must be considered in evaluations of the relative risk of cigarette smoke, including the concentration of all of the harmful smoke constituents as well as the potency and biological availability of each component."

"Philip Morris USA is working hard to develop and bring to market cigarettes with significant reductions in a number of harmful smoke constituents," said Farriss. "We are equally committed to the enactment of federal legislation to provide a regulatory scheme that will help manufacturers deliver products with less risk compared to cigarettes currently on the market."

Philip Morris USA continues to believe that enacting federal legislation to provide the Food and Drug Administration with regulatory authority over cigarettes would provide the best framework to help reduce the harm associated with cigarette smoking. The Company will testify in support of such legislation at a Congressional hearing on Tuesday.