Altria Group and Philip Morris USA Applaud Senate Passage of Bill Granting the FDA Regulatory Authority Over Tobacco Products.

NEW YORK -- Today the U.S. Senate passed bipartisan legislation that would provide the U.S. Food and Drug Administration (FDA) with comprehensive, meaningful and effective authority to regulate cigarettes and other tobacco products. Acting on a corporate tax bill to reduce punitive tariffs on American exports, the Senate amended the Foreign Sales Corporation/Extraterritorial Income Act (FSC/ETI) to include both FDA regulation legislation introduced earlier by Senators Mike DeWine (R-OH) and Edward Kennedy (D-MA) and tobacco grower buyout legislation. Today's 78-15 vote, on the DeWine/Kennedy/McConnell amendment clears the way for the convening of a Conference Committee to reconcile the Senate bill with the version of FSC/ETI passed by the House last month.

"Altria Group and our domestic tobacco company, Philip Morris USA, enthusiastically endorse passage of a final FSC/ETI bill that contains the DeWine/Kennedy FDA proposal in its entirety, and we will strongly oppose any and all amendments to this language during the upcoming House/Senate Conference Committee," said Steven C. Parrish, Senior Vice President, Corporate Affairs, Altria Group. "We look forward to working with all stakeholders in support of this legislation."

"As with all legislative initiatives, this historic FDA legislation reflects some difficult choices and important compromises by everyone involved," Parrish added. "Any attempt to alter it in Conference risks upsetting the delicate balance achieved by the sponsors, and would imperil not only long-awaited regulation of tobacco products and the tobacco quota buyout, but the entire FSC/ETI bill as well."

The legislation passed by the Senate today contains a wide array of important provisions that would greatly benefit consumers, the public health and all legitimate participants in the tobacco industry. Among its many important provisions are:

--The legislation would give FDA the authority to impose performance standards for the design and manufacture of cigarettes in order to reduce the harm caused by smoking. Under the legislation, FDA would, as part of its effort to reduce or eliminate harmful ingredients and smoke constituents, consider whether a new performance standard would significantly increase the demand for contraband cigarettes. We believe this is an important consideration in order to prevent the unintended consequences of black market cigarettes. It is also important that the legislation provides that FDA cannot ban the sale of cigarettes to adults.

--The legislation would change the language of the current cigarette health warnings, substantially enlarge their size and authorize FDA to require new warnings in the future. The legislation would not, however, change the Supreme Court's rulings regarding the product liability implications of compliance with warning requirements.

--The legislation would authorize FDA, as well as states and localities, to regulate the time, place and manner of cigarette advertising and promotion, consistent with the First Amendment's protection of commercial free speech to adults.

--The legislation provides that FDA's product standards would be consistent on a nationwide basis.

--The legislation would give FDA the authority to combat the existence of counterfeit, contraband and other illicit tobacco products.

--The legislation contains a number of other provisions that would benefit the public health and provide important oversight for all tobacco manufacturers. For example, FDA would be authorized to:

--  conduct educational efforts regarding the dangers of
            tobacco use,

        --  take new steps to curb underage tobacco use,

        --  strictly regulate new tobacco products that may reduce the
            risk of disease or exposure to harmful compounds in
            cigarette smoke, and

        --  ensure that tobacco products are not adulterated.

Altria Group is the parent company of Kraft Foods, the world's second largest food company, Philip Morris International, the world's leading international cigarette business, and Philip Morris USA, the leading cigarette manufacturer in the United States. For more information about Altria, its family of companies, and the recently introduced FDA legislation visit www.altria.com.

Philip Morris USA is an operating company of Altria Group. For more information about Philip Morris USA, its products, programs and positions on tobacco-related issues, please visit www.philipmorrisusa.com.