The New York Times editorial page leads today with a screed against tobacco companies for their lawsuit challenging advertising restrictions in the new FDA law. The board alleges that the companies are challenging the law so that they can surreptitiously market to minors. Leaving aside the authors’ cavalier dismissal of First Amendment rights, this is yet another example of how the board completely misunderstands the current state of tobacco regulation.
It’s easy to test whether the Times‘ charge has merit since there are basically just two reasons that firms pay for advertising. One is to introduce new consumers to a product they don’t currently use, which is what the Times believes Big Tobacco wants to do with young people and cigarettes. The other is to lure existing consumers of a product away from competing producers. This lets us make different predictions based on which motive we think is dominant.
If the Times is right and it’s the former, all tobacco companies would benefit from overturning the advertising restrictions and would present a united opposition to the law. If it’s the latter, only the smaller tobacco companies would challenge it; the largest firm would favor the law as a means of restricting competition.
Is the Times right? Bloomberg provides the answer:
Reynolds, the second-largest U.S. cigarette maker, and third-biggest Lorillard Tobacco Co. sued after opposing the legislation that gives the U.S. Food and Drug Administration oversight over tobacco products. […] Altria Group Inc.’s Philip Morris USA, which makes half of the cigarettes sold in the U.S., supported FDA regulation and endorsed the law.
This doesn’t mean that the smaller companies don’t want to target youth too or that Philip Morris won’t eventually join in, but Philip-Morris’ ambivalence is telling. The anti-competitive effects of the law were clearly one of the main factors at work in its passage.
Reading the Times’ editorial you would never know that the nation’s single largest producer of cigarettes isn’t part of the current lawsuit. This is the same error of omission they made with their opposition to Senator Kirstin Gillibrand, discussed at length here. Time and again the board’s anti-tobacco zealotry has caused them to misunderstand how tobacco regulation has changed after the Master Settlement Agreement. Big tobacco companies, and Philip Morris especially, now view the government as a partner they can use to protect their market share. By consistently misconstruing the effects of new regulations and neglecting to mention the industry’s hand in writing them, The New York Times has become the best mouthpiece Philip Morris could ever hope for.