Altria Group and Philip Morris USA Express Great Disappointment on the Lack of FDA Regulation in the FSC/ETI Tax Bill.

NEW YORK -- Today, the Senate followed the House in approving a conference agreement on the Foreign Sales Corporation/Extraterritorial Income Act (FSC/ETI) that fails to provide the Food and Drug Administration (FDA) with any authority to regulate tobacco products.

"This lost opportunity is a huge disappointment, not only for Altria Group and our domestic tobacco company, Philip Morris USA, but for all of those who hoped to see a coherent, comprehensive national tobacco policy in this country," said Steven C. Parrish, Senior Vice President, Corporate Affairs, Altria Group.

"The failure to pass this legislation with all its benefits to consumers, public health and all legitimate participants in the tobacco industry is a bitter disappointment and a significant step backwards in the effort to reduce the harm associated with tobacco," said Mike Szymanczyk, Chairman and CEO, Philip Morris USA.

In July, the Senate passed by an overwhelming majority of 78-15, an amendment to the FSC/ETI bill that included bipartisan legislation that would have provided the FDA with the power to regulate cigarettes and other tobacco products. Yesterday, the Senate reiterated its strong support for FDA regulation of tobacco products by again passing identical freestanding FDA legislation.

The Senate legislation, which was supported by leading public health groups, contained a wide array of important provisions including:

--Larger, more emphatic health warnings on all cigarette packs and advertisements;

--Ban on the sale of candy and fruit-flavored tobacco products;

--Full disclosure of all ingredients added to tobacco products;

--Authority for the FDA to regulate, or ban, terms such as "light" and "low tar";

--Authority for the FDA to mandate changes in the design of tobacco products to protect the public health, including authority to remove harmful ingredients and smoke constituents;

--Authority for the FDA to do more to prevent minors from using tobacco products; and

--Authority to establish standards for products that could potentially reduce the harm associated with smoking and define the appropriate way to communicate about these products.

"The magnitude of this missed opportunity, and our disappointment that Congress failed to enact this historic compromise are hard to overstate. However, we intend to move forward by working as hard as we can with all interested stakeholders to address the many longstanding public policy issues surrounding the tobacco industry now left unresolved," added Parrish.

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 FDA legislation please 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.