One of the final legal battles in Philip Morris' quest for a change of its name ended Friday as the suit against the conglomerate was dismissed in a Colorado federal court. Philip Morris Companies Inc. (MO) is now free to change its name to Altria Group Inc., as was proposed back in November 2001. Although this may seem trivial, the name change is a subtle way to deceive the public about the true nature of Philip Morris Companies Inc.
A name change is an attempt by Philip Morris to deceive the public through relieving itself of the stigma associated with the company; a stigma defined by the conglomerate's production and manufacture of tobacco products. The magician's act Philip Morris is trying to perform is one of misdirection; grabbing the attention and awareness of the public in one way while hiding the truth about the main economic force of the conglomerate -- an economic force that revolves around tobacco.
Philip Morris, Esq. first started his tobacco company in a small shop on London's Bond Street in the mid-19th century. The growth of his tobacco enterprise expanded into the United States and by 1919, a firm of American stockholders acquired U.S. Philip Morris and incorporated the enterprise under the name Philip Morris & Co,. Ltd,. Inc. Despite the fact that the enterprise created by Philip Morris has morphed into a conglomerate of interdisciplinary industries, the revenue driving engine of the company has not changed over time. The main revenue engine was, and still is, tobacco.
For the third quarter in the 2002 fiscal year, the net revenue of Philip Morris was $19.996 billion, and $12.67 billion of the net revenue was earned from the domestic and international sale of tobacco. Cigarette brands such as Marlboro, Virginia Slims, Parliament and others accounted for around 63 percent of the net revenues for Philip Morris. Yet the fiscally sound conglomerate fought a legal battle to change its corporate name, a name that had only brought financial success.
Philip Morris is a diversified company that not only owns the Philip Morris label but also Kraft Foods Inc., Philip Morris Capital Corporation and an economic interest of 36 percent in SABMiller, the world's second largest brewing company.
A name change thus would not make much sense. A corporation that increases revenue each quarter, pays out annual dividends and is financially sound should have no reason to change its name. A name change then could only occur for social reasons, not economic reasons. Philip Morris believes that its slight-of-hand will distance itself in the eyes of the public from the product it sells.
The only economical advantage of changing the name would be to curb future losses which could occur due to the relationship between Philip Morris and tobacco. But because future implications are unknown, and the economic picture at the present time shows profits, this reason does not explain the desire to incur a name change.
Due to the failure of this logic, the true reason for the name change cannot be based on economic principles alone. This explanation could be that Philip Morris believes by changing its name it can garner public support that its previous name could not. What this basically means is that Philip Morris, through tricking the public, can divert some of the negative publicity it receives from its tobacco products by making it harder for the public to relate the products back to the company.
According to its Web site, "the significance of the name, 'Altria,' is derived from the Latin word altus, which reflects the corporation's desire for its family of companies to always 'reach higher' in striving to achieve greater financial strength and growth through operational excellence, consumer brand expertise and a growing understanding of corporate responsibility."
This is a slap in the face to the intelligence of the general public. Philip Morris is saying it will be beneficial to change its name rather than its business policies because the former will garner more positive results than the latter. If Philip Morris wanted to improve its image it would not try to fool the public with a name change but make an honest effort to divest its interests in tobacco.
Unfortunately, divesting its tobacco interests would financially devastate the conglomerate. Tobacco is too ingrained in its revenue to rid the company of this necessary evil. Philip Morris puts profits before people and due to this fact it is trying to make the best out of its situation by taking advantage of the public.
By presenting a new name, a new image and a new ideal, Philip Morris also will be hoping to elicit a new response to the conglomerate from the public. This low opinion of the public by Philip Morris must be proven wrong.
Philip Morris for too long has been a producer of an agent that kills tens of thousands of people each year. To remedy this horrific black mark on the company, Philip Morris has decided to change its name rather than its policies. Philip Morris must learn that one cannot judge a book by its cover, or in this case by a name. Behind the name Altria is the same company that puts in the hands of people death in the form of cigarettes, and no name will ever be able to cover up that fact.
(Jordan Levy is a first-year College student.)
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