Fourteen years ago, the U.S. surgeon general issued a report calling cigarettes a serious health hazard. Seven years ago, the Federal Communications Commission banned cigarette commercials from television. Five years ago, the Civil Aeronautics Board commanded airliners to separate smokers from nonsmokers.
For nearly two decades, the industry that lights up has itself rarely been out of the public spotlight.
And through it all, the tobacco companies not only have survived but prospered. Like paste in a tube, which when squeezed at one end squirts out another, the tobacco industry has been poked, pinched and pummelled, only to duck, dodge and innovate so as to emerge more profitable than ever.
"The tobacco industry is alive and well," said J. Tiley Wilson, showing all due satisfaction during an interview here. As chief of R.J. Reynolds' Industries' tobacco business, Wilson sells more cigarettes in the U.S. than anyone else. On a shelf beside his desk, he keeps keeps sample packs of the brands Reynolds makes. They sit there, perched on pedastals of varying heights, resembling trophies.
Judging from the surface look of things here in the heart of tobacco land, trophies are the order of the day. R.J. Reynolds, the leader in the U.S. tobacco market, recently moved into a shimmering $40 million chrome and steel headquarters building - and has another $33 million complex under construction. Its cigaret machines continue to roll out 800 million tobacco-filled paper tubes a day. Earnings for Reynolds' tobacco subsidiary last year soared more than $60 million to a record $618 million.
The mood in the offices of the industry's other giant - Philip Morris Inc. - has been even rosier. Tobacco profits there jumped $73 million last year to $474 million, and last week Phillip's chairman, George Weissman, predicted 1978 earnings will be up 20 percent over 1977. Even the tobacco farmers have fared well thanks to exceptional prices for their crops last summer.
The tobacco industry's persistent vigor "continues to astound me," said Helen Jones, an American Lung Association official.
But below the surface, there is clear evidence the antismoking movement has taken a toll and the tobacco industry may be nearing its twilight. Industry growth slowed to less than one percent last year and, though the number of cigarettes sold annually has climbed to more than 600 billion, most industry observers believe sales soon will peak and then gradually crode.
Left standing in a static market, tobacco companies are likely to become even more eager to draw customers away from one another. They already have begun gearing for tough, high-pitched marketng campaigns. The primary battlefield is sure to be the lower-tar brands, which have been proliferating in variety and sales as more traditional higher-tar brands have lost ground.
At the same time, the tobacco companies have been hedging their bets by moving into overseas markets and diversifying into a host of other products. The people at Reynolds, who brought you the springtime freshness of Salem and challenged you to walk a mile for a Camel, today sell Hawaiian Punch, operate the largest container shipping fleet in the U.S. and explore for oil. At Philip Morris, they bottle Seven Up and brew Miller beer as well as roll Marlboro. American Brands sells Hydrox cookies in addition to Pall Malls. And Liggett & Myers manufactures Alpo dog food along with L&Ms.
This diversification has provided the tobacco companies with a broader base from which to operate. Politically, some say, it has made them more confident - and more bold. Economically, it certainly has made their parent corporations more invincible.
Meantime, antismoking forces have been doing some gearing up of their own for another major assault on the industry. The current campaign appears to be the most formidable in years. It is invigorated by a fresh, angry zeal. And it has a fiercely combative figurehead in the person of Joseph Califano, secretary of Health, Education and Welfare.
The renewed effort is being waged on several fronts:
In California, voters decided next Tuesday on Proposition 5, a proposal that would restrict smoking on the job.
In Washington, Califano has launched through HEW an ambitious $30 million campaign to educate the public against cigarette smoking. Meantime, Capitol Hill opponents are preparing another round of legislative initiatives intended to curb smoking.
In 9 states, there are 35 bills pending that would bar smoking in public areas. Six similar measures were approved in four states so far this year, while 61 proposals in 26 states were defeated.
In medical circles, researchers anxiously await a new report by the U.S. surgeon general, scheduled for January, which promises to cause as much of a political storm as the 1964 report.
But for all the fight and fever against them, cigarette makers hardly appear to be fretting. Braced both by continued financial strength and by no mean political muscle of their own, protobacco forces have launched a counterattack, sounding resentment at what they see as the propaganda excesses of the antismoking lobby and accusing their critics of spreading misinformation.
"We have become increasingly frustrated over groups that call themselves voluntary health organizations," said William Kloepfer, an official of the Tobacco Institute, the Washington-based lobbying arm for the industry. "They have become careless about what they say. We've been going out of our way to point that out."
Just how well-financed the Tobacco Institute is by the industry it serves remains a secret. But it is clear the institute has beefed up its staff of lobbyists and campaigners, expanding from 20 people in 1968 to 69 at present.
For obvious reasons, the tobacco lobby remains a powerful political force on Capitol Hill and in state legislatures. Tobacco is a $17 billion industry with deep and wide roots in the Southeast. It is the fifth largest cash crop in the country, involving more than 400,000 farmers and 56,400 production workers. Last year, federal, state and local governments collected more than $6 billion in tobacco excise taxes.
As a sign of the industry's political muscle, critics point to the federal excise tax on cigarettes - which has remained unchanged at 8 cents a pack since 1951. In addition, critics say, the industry remains largely unregulated and unaccountable to any agency of government for the content of its products or the health consequences of their use.
Of course, it doesn't hurt to have a Southerner in the White House. President Carter has made two trips to this state in the last few months. One was to a tobacco auction in Wilson, where Carter reaffirmed his support for tobacco subsidies. (The president's visit, by the way, came on a weekend and auctions aren't held on weekends. But never mind, they staged a mock one just for the chief.)
On the question of cigarette smoking and health, the industry's standard position is that the medical evidence remains inconclusive. It won't say that cigarettes don't cause cancer or other illnesses, only that more research is needed. The industry notes that all the studies so far simply have shown a statistical correlation between smoking and a variety of illnesses. Nothing in the actual act of smoking has been identified as the specific link to a shorter life, the industry declares.
This claim really riles the antismoking crowd. "They still try to make the case there is a controversy," asserted Jones, the lung association official. "That's just not true. We have no doubt that cigarette smoking can kill."
In general, the antismoking lobby has been pleased with its success at dissuading people from smoking. Since 1964, the percentage of men smoking cigarettes has dropped by 26 percent and the percentage of women smoking by 10 percent. Today, nonsmokers comprise about two-thirds of the adult population.
The movement still has a long-range goal of stopping all cigarette smoking. But for the near future, the aim is to chip away at the margins in a bid to reduce consumption and raise awareness.
In recent months, the antismokers have concentrated their efforts on restricting smoking in public - the so-called public smoking, or passive smoking, issue. Smoking has been banned for years in such places as movie theaters, buses and department stores, so the idea has plenty of precedents, but the focus today is on banning smoking in a much greater variety of public areas.
Antismoking groups also have emphasized the economic costs that smoking imposes on society, including medical and hospital bills and cigarette-ignited fires. This claim, together with the public smoking argument, has effectively moved the smoking debate out of the parlor, into the streets and onto the ballot. The controvery has reached its most rousing pitch over California's Proposition 5.
Until two weeks ago, the referendum seemed to have a 50-50 chance of passing. But the tobacco companies, fearing an antismoking victory could spread across the country like Proposition 13, have poured more than $5 million into defeating the measure.
To head off similar referenda elsewhere, the tobacco industry has begun a broad campaign to publicize its views, including talk show appearances, full-page ads and educational seminars on smoking. "We're a little more with it in dealing with the public," said Kloepfer.
Industry officials hope to ride out the rest of the antismoking drive - and keep millions smoking - by moving more aggressively into the lower-tar market. The development of lower-tar cigarettes has been part of a larger product diversification that has produced an explosion in the variety and type of cigarettes available.
Two decades ago, there were just a handful of brands of sale, all unfiltered, strong-tasting and averaging 40 milligrams of tar. Today, there are about 160 varieties on the market, and new ones are streaming steadily from the industry's research labs. More than 20 new brands and brand extensions (low-tar versions of familiar high-tar brands) were introduced in 1977 alone. Nearly two-thirds of all cigarette sales are in the low-tar category, defined rather arbitrarily as 15 milligrams of tar or less. By 1981, low-tar brands are expected to command a full half of the market.
Low-tar cigarettes received a welcomed boost last August when Dr. Gio Gori, deputy director of the National Cancer Institute's causes-and-prevention division, reported "tolerable levels" of smoking for some ultra-low-tar brands - most notably, Carlton (made by American Tobacco) and Now (made by Reynolds). Gori's report was laced with qualifications, but it left the impression that some cigarettes are relatively safe to smoke in limited quantities.
"If you factor out the health issue," said George Domolky, an analyst with Wellington Management Co., "the tobacco business is a perfect business in an inflationary environment because the labor cost is very low and the industry is dominated by a few large companies."
"As to what could go wrong," noted Arthur "Bugs" Baer, an analyst with E.F. Hutton & Co., "it's hard to imagine anything that could go wrong that hasn't gone wrong already."
Of course, there's always room for surprises. The health controversy, for instance, could be settled conclusively. Or marijuana could be legalized, in which case the tobacco companies would be in a natural position to capitalize on the legitimate joints.
But industry officials say they aren't betting on either.