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Jakarta Post
The Jakarta Post
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Proposed merger of Reynolds American, Lorillard, raises public health concerns

  • The Jakarta Post

    The Jakarta Post

Jakarta | Wed, July 16, 2014 | 09:56 pm

The Campaign for Tobacco-Free Kids says the proposed merger of two tobacco companies, Reynolds American and Lorillard, raises important public health issues because it will bring together two tobacco giants with a long history of marketing to children and deceive the public about the deadly consequences of their products.

'€œRegulators must be on guard to ensure not only that the proposed merger complies with antitrust laws, but also that it does not increase the power of these companies to market to kids or otherwise harm public health,'€ the campaign'€™s president, Matthew L. Myers, said in a release made available to The Jakarta Post on Wednesday.

The companies sell two of the three most popular cigarette brands among US youth, namely Lorillard'€™s Newport and Reynolds'€™ Camel, and the most popular smokeless tobacco brand among youth, namely Grizzly which is made by Reynolds'€™ American Snuff Company subsidiary.

Myers said Reynolds American and Lorillard were not merely two benign corporations seeking to maximize profits through a merger.

'€œThese companies make products that are the number one cause of preventable death and disease in the US. Their products fuel a tobacco epidemic that kills 480,000 Americans and costs the nation at least US$289 billion in healthcare bills and economic losses each year,'€ he said.

The companies have reportedly engaged in illegal conduct, leading a federal judge in 2006 to rule that Reynolds, Lorillard and other major cigarette manufacturers violated civil racketeering laws by perpetuating a decade-long fraud against the American people.

The campaign says the proposed merger also involves the sale of several cigarette brands and Lorillard'€™s best-selling electronic cigarette brand, Blu, to Imperial Tobacco. Blu, one of the most irresponsibly marketed e-cigarette brands, has used many of the same themes and tactics long used to market regular cigarette to kids.

The proposed merger seems to be driven by steep smoking declines in the US in which cigarette sales fell by 37.1 percent from 2000 to 2013, with the largest decline in 2009, when a 62 US cent per pack increase in the federal cigarette tax was implemented.

Reynolds and Lorillard no doubt hope the economic and political power of a merged company will help them slow or reverse these trends,'€ said Myers.

'€œElected officials and regulators must be equally aggressive in working to accelerate progress in reducing smoking and other tobacco use.'€ (ebf)