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Why Altria Wants Autopsied Corpses and Diseased Lungs on Cigarette Packs

In the biggest changes to tobacco marketing rules in 25 years, the FDA is requiring cigarette companies to place large, gruesome warning labels on packages and in ads, a move that Altria (MO), the country's biggest tobacco company and owner of the Marlboro brand, is actually welcoming.

It's a strange state of affairs for a tobacco company, but Altria's acceptance of what could be sales-killing images -- among the possibilities are a child's face immersed in second hand smoke, a gaunt cancer patient and an autopsied corpse -- stems from its support of the 2009 law that paved the way for these new warning labels. The Family Smoking Prevention and Tobacco Control Act, gave the FDA, for the first time, the power to regulate tobacco products, including the setting of standards for nicotine content, the regulation of chemicals in cigarette smoke and the banning of most tobacco flavorings and use of the words "light" and "low tar".

Altria pushed for passage of the seemingly unappealing law because after years of lawsuits and threats of major government crackdowns, it concluded that FDA regulation was better than the alternative of an outright ban on cigarettes. The 2009 law, importantly, does not allow the government to outlaw smoking or ban nicotine.

Government regulations are also likely to give tobacco companies some legal cover in lawsuits. In a world where there are few regulations on cigarettes, it's easier for lawyers to argue that companies are breaking laws. FDA rules give companies big new challenges but also clear standards to abide by, and they ensure that everyone plays by the same rules. After the law was passed, Altria spokesman Brendan McCormick said the company supported it because of "the greater predictability and stability we think it will bring to the tobacco industry."

Other major US cigarette companies -- R,J. Reynolds (RAI) and Lorillard (LO) -- disagree. Unlike Altria, they fought against the tobacco control law and have chosen not to comment on the warning labels, which go into effect in October 2011 and will also appear in cigarette ads.

As for the question of whether scary images will achieve the desired effect of decreasing smoking rates, which have held steady in the U.S. in recent years, evidence suggests that they will. Canada introduced similar warning labels in 2000 and since then the percentage of Canadians 15 years or older who smoke declined from 25% in 1999 to 18% in 2009 (though there have been other anti-smoking initiatives during that time). Experts say that scary pictures are worth a thousand words. Writing in the Canadian Medical Association Journal, Dr. Matthew Stanbrook noted that the "knowledge of specific health consequences of smoking is twice as high among Canadian smokers compared to their counterparts in the US and UK."

For Altria, which has built an extensive R&D operation and is working on creating safer cigarettes, this is just a cost of doing business.

Image from the FDA