Tobacco Documents Online

0 • t Niew York Times April 6, 1967 TOBACCO STUDIES ~ DRAW CRITICISM ~Chief of American Denies Relationship to Disease By ALEXANDER R. HA.1L1fER I Robert B. Walker, president and chairman of the American Tobacco Company, criticized+ yesterday various studies that contend that cigarette smoking causes many diseases The tobacco executive said ' that "no clinical or biological I evidence has been produced which demonstrates how ciga- rettes relate to cancer or any other disease in human beings." Speaking to more than 1,000 stockholders at the company's annual meeting in Flemington; N. J., Mr. Walker said that "statistical studies can show as- sociation but cannot prove cause-and-effect relationship.' Mr. Walker said the problem of smoking and its relationship to health was aggravated by persons who do not seek seien- I tific and 8actual answers but' instead "unrelentingly' and often hysterically seek to implicate smoking in almost' every ail- ment known to man." 1964 Report Recalled Cigarette smoking has been put under increasing attack by Government agencies and pri- vate groups in recent years. In,, 1964, a report to the SurgeonI , General asserted that there was j definite refationship between Narette smoking and' lung cancer. Mr. Walker told the meeting that although the company's i first-quarter sales would reach, a new high, net income would, be "slightly below" 1966 results i pecause of "added costs en-l tailed in our diversification and i other areas." For the first quarter of 1986, the company netted $16.840,- b00, or 66 cents a share, on sales of $288,441,000. American Tobacco acquired Sunshine Biscuits, Inc., and the James B. Beam Distilling Com- pany in 1966. Last June, Amer- ican Tobacco announced. an agreement in principle to ac- .quire a 52.6 per cent int'erest in the Buckingham Corpora-i tion, a liquor. , importer, from I Schenley Industries, Inc. Ynces Increased Last year, under the pres- sure of steadily increasing costs of leaf tobacco in particular and labor and other costs as; well, American Tobacco raised the prices for its cigarette brands 40 cents a t'housand. The company later cut the increase in half because of heavy Government pressure. Mr. Walker informed yester- day'.-R meeting that since the company's price increase last April, leaf and other costs have continued to rise and "it Is becoming Increasingly difficult to maintain our margins." Some trade sources said tha.t ~Mr. Wallccr's statement might ndicate that another price rise for cigarettes may again be.in the offing. i On the subject of new brand : introductions, Mr. Walker said !the companyy introduccd eight new filter brands nationally in ;the last three years, and a ninth, Bull Durham extra size filter tips,, will go national in the near futurca The company's brands include Pall Mall, Lucky Strike, Herbert Tareyton and Carlt'on: . Turning to the company's re- eent acquisitions, the tobacco executive said.that "our experi- ence so far with Sunshine Bis- cuit's and Beam has been most gratifying." He said that sales and profit projections for both concerns had been increased this year and that the two would "account for approximatelyi $325-million in~sales in 1967." Mr. Walker said' the com- pany's diversification activity cannot help but improve "our! corporate strength." But, he cautioned, "one cost of a diver- sification program is the inter- est paid on the capital needed for acquisitions when made for cash." He told shareholders that this was an added cost reflected in the 1966 Income statement that will again' be reflected In the ~ 1967 results. Last' year, the corn- , pany earned $86,019,000, or $3.01 a share, on sales of $1; 427;572,000. The company is the nation's second largest tobacco concern, ranking• behind the R. J. Reynolds Tobacco Cont- pany. During a question - and - I answer period after his speech, Mr. Walker criticized a study made last month by the Ros- well Park, Memorial Institute, which listed the tar and nicotine content of various brands. Thell • rer,-rt said that American To-1I bt.bw:.. Pall Mall brand' ranked, very nigh In tar content. .Mr. Walker said he believed that the . figures used in the study were "not authentic." The report advised smokers who cannot break the habit to switch to brands that contain low quantities of tar and nicotine. One stockholder suggested to Mr. Walker that the com- pany should introduce fewer I brands on the market and should concentrate more on sell- ing the brands it already has. Most of the shareholders at the meeting were brought to the session in chartered buses and then had a roast beef din- ner in Flemington as guests of the company. At the meeting, Everett Kov- ier was elected to the board of directors of American Tobacco Mr. Kovler is president and all director of the James B. Beam Distilling Company. He was the' only new director elected to thel 17-man board at the meeting. 33