Altria

Not to be confused with Altera, Nutria, or Altaria (disambiguation).
Altria Group, Inc.
Public
Traded as
Industry Tobacco
Founded 1985 (1985)
Founder Philip Morris, Kraft Foods Inc, Nabisco Holdings Corporation
Headquarters Henrico County, Virginia, U.S.A
Area served
 Worldwide
Key people
 Martin Barrington
(Chairman) & (CEO)
Products Tobacco and wine
Revenue Increase US$ 25.43 billion (2015)
Increase US$ 8.36 billion (2015) [1]
Increase US$ 5.24 billion (2015)
Total assets Decrease US$ 32.46 billion (2015)
Total equity Decrease US$ 2.88 billion (2015)
Number of employees
 8800 (2015)[1]
Website Altria.com

Altria Group, Inc. (renamed from Philip Morris Companies Inc. on January 27, 2003) is an American corporation, it is one of the world's largest producers and marketers of tobacco, cigarettes and related products. It operates worldwide corporation and is headquartered in Henrico County, Virginia, United States of America.

Altria is the parent company of Philip Morris USA, John Middleton, Inc., U.S. Smokeless Tobacco Company, Inc., Philip Morris Capital Corporation, and Chateau Ste. Michelle Wine Estates. Philip Morris International was spun off in 2008. Altria maintains a 28.7% stake in the UK-based brewer SABMiller plc. It is a component of the S&P 500 and was a component of the Dow Jones Industrial Average until February 19, 2008. On January 6, 2009, Altria acquired UST Inc., a smokeless tobacco manufacturer, which also owned wine producer Ste Michelle Wine Estates, and is now a subsidiary of Altria. This corporation was entitled from the american system in 1995.

History

Altria emerged from Philip Morris. The onset of "rebranding" of Philip Morris Companies to Altria took place in 2003 (Philip Morris would later split, with PM USA remaining Altria's primary and only consistently held asset). Altria was created because Philip Morris wished to emphasize that its business portfolio had come to consist of more than Philip Morris USA and Philip Morris International; at the time, it owned an 84% stake in Kraft,[2] although that business has since been spun off.[3] The name "Altria" is claimed to come from the Latin word for "high" and was part of a trend of companies rebranding to names that previously did not exist, Accenture (previously Andersen Consulting) and Verizon being notable examples,[4] though linguist Steven Pinker suggests that in fact the name is an "egregious example" of phonesthesia — with the company attempting to "switch its image from bad people who sell addictive carcinogens to a place or state marked by altruism and other lofty values".[5]

The company's branding consultants, the Wirthlin Group, said: “The name change alternative offers the possibility of masking the negatives associated with the tobacco business,” thus enabling the company to improve its image and raise its profile without sacrificing tobacco profits.[6]

Philip Morris executives thought a name change would insulate the larger corporation and its other operating companies from the political pressures on tobacco.[6]

The rebranding took place amidst social, legal and financially troubled circumstances.[7] In 2003 Altria was ranked Fortune number 11, and has steadily declined since. In 2010 Altria Group (MO) ranked at Fortune number 137, whereas its former asset, Philip Morris International, was ranked 94th.[8]

In 2006, a United States court found that Philip Morris "publicly ... disputed scientific findings linking smoking and disease knowing their assertions were false." [9]

On March 30, 2007, Altria's 88.1% stake in Kraft Foods Inc was spun off, through a distribution of the remaining stake of shares (88.1%) to Altria shareholders. That same year, Altria began selling all its shares of Philip Morris International to Altria stockholders, a spin off that was completed on March 28, 2008. Again in 2007 the company began the acquisition of cigar manufacturer John Middleton Co. from Bradford Holdings, Inc., which was complete in 2008. After Philip Morris International spun off, the former international subsidiaries halted the purchase of tobacco from America, which was a major factor in the closing of a newly renovated plant in North Carolina, an approximately 50% reduction in manufacturing, large-scale layoffs, and induced early retirements.[10]

In 2008, Altria officially moved its headquarters from New York City to Richmond, Virginia after Philip Morris sold its downtown offices in New York City a decade earlier. With a few exceptions, all manufacturing, commercial, and executive employees had long been based in and around Richmond. Currently the company is headquartered in an unincorporated area within Henrico County, less than five miles west of the city limits of Richmond and less than ten miles from its downtown Richmond campus.

Aside from the Philip Morris/Altria headquarters, some of their other buildings included the Philip Morris Center for Research and Technology in downtown Richmond, their manufacturing center in South Richmond, and the adjacent operations center which began shutting down in 2007-2008, as a result of the loss of demand from PMI member companies. The layoffs beginning in 2007 affected thousands of Altria, Altria Client Services, Philip Morris USA, and contracted employees in Richmond and North Carolina.

In 2009, Altria finalized its purchase of UST Inc., whose products included smokeless tobacco (made by U.S. Smokeless Tobacco Company) and wine (made by Ste. Michelle Wine Estates).[11] This ended a short era of competition between the new Marlboro smokeless tobacco products such as snus, and those produced by UST Inc.

In 2015 the company was criticized for a number of active and possible lawsuits with countries such as Uruguay, Australia and Ireland over proposed changes to their cigarette packaging and anti-smoking laws.[12]

Holdings

Altria Group, Inc. owns 100 percent of Philip Morris USA, John Middleton, Inc. and Philip Morris Capital Corporation. It also owns 28.7% SABMiller PLC, one of the world's largest brewing companies, where it has 3 seats on the 11-person board of directors.

Before the recent restructuring, the net revenue (and operating income) of Altria Group, Inc. came predominantly from its tobacco business, as is shown in the following table. Altria's share of SABMiller's revenue and profits is not included in the table below because its holding are too small to be consolidated in the group accounts.[13]

Activity Net revenue
in 2006
(millions USD)		 Net revenue
in 2006
(%)		 Operating
income
in 2006
(millions USD)		 Operating
income
in 2006
(%)
USA tobacco 18,474 18.2% 4,812 26.5%
International tobacco 48,260 47.6% 8,458 46.5%
North American food 23,118 22.8% 3,753 20.7%
International food 11,238 11.1% 964 5.3%
Financial services 317 0.3% 176 1.0%
Total 101,407 100% 18,163 100%

Brands

Corporate governance

Board of directors

Members of the board of directors of Altria Group as/of February 2013 were:[14]

Headquarters

Prior to being based in Virginia, Philip Morris had its headquarters in Midtown Manhattan, New York City.[15] In 2003, Philip Morris announced that it would move its headquarters to Virginia. The company said that it planned to keep around 750 employees in its former headquarters. Brendan McCormick, a spokesperson for Philip Morris, said that the company estimated that the move would save the company over $60 million each year.[16] The company now has its head offices in an unincorporated area of Henrico County, Virginia, in Richmond.[17] In addition, the company has a 450,000-square-foot, $350 million Center for Research and Technology located in downtown Richmond at the Virginia BioTechnology Research Park that employs approximately 600 scientists, engineers and support staff.

Political influence

According to the Center for Public Integrity, Altria spent around $101 million on lobbying the United States government between 1998 and 2004, making it the second most active organization in the nation.[18][19]

Altria also funded The Advancement of Sound Science Coalition which lobbied against the scientific consensus on anthropogenic climate change.[20]

Daniel Smith, representing Altria, sits on the Private Enterprise Board of the American Legislative Exchange Council (ALEC).[21]

See also

References

  1. 1 2 "Altria Group, Inc. 10-K report 2015". Securities and Exchange Commission. Retrieved November 6, 2016.
  2. ↑ "Philip Morris completes its rebranding to Altria Group". Retrieved 27 January 2016.
  3. ↑ Dan Caplinger (15 March 2007). "Coca-Cola vs. Altria: Altria". Retrieved 27 January 2016.
  4. ↑ "Altria Director Discusses Rebranding Company, CNNfn". Finance Wire. November 11, 2003.
  5. ↑ Pinker, Steven (2007). The Stuff of Thought. Penguin Books. p. 304.
  6. 1 2 "Altria Means Tobacco: Philip Morris's Identity Crisis". PubMed Central (PMC). Retrieved 27 January 2016.
  7. ↑ "Business Plan facts, information, pictures - Encyclopedia.com articles about Business Plan".
  8. ↑ "Fortune 500 2010: Top 1000 American Companies - Altria Group - MO - FORTUNE on CNNMoney.com". Money.cnn.com. Retrieved 2011-03-16.
  9. ↑ "The Verdict is In: Findings from United States v Philip Morris" (PDF). Tobacco Legal Consortium. 2006.
  10. ↑ Walker, Dionne (2007-06-26). "Altria closing North Carolina plant". Usatoday.Com. Retrieved 2011-03-16.
  11. ↑ "Our History - Altria: 2001-Present". altria.com. Archived from the original on 2 September 2010. Retrieved 2010-09-16.
  12. ↑ Parker, Ken (16 February 2015). "John Oliver targets cigarettes on 'Last Week Tonight'; Philip Morris reacts". Los Angeles Times. Retrieved 16 February 2015.
  13. ↑ US Securities and Exchange Commission, Altria Group, Inc. Annual report 2006
  14. ↑ "Board of Directors", Altria webpage; with associated bio pages. Retrieved 2013-02-26.
  15. ↑ "Contact Us." Philip Morris Companies. April 9, 2001. Retrieved on October 19, 2009.
  16. ↑ "Philip Morris to Move Headquarters from New York City to Richmond, Va.." New York Daily News. March 5, 2003. Retrieved on October 19, 2009.
  17. ↑ "Contact Us." Altria. Retrieved on October 19, 2009.
  18. ↑ "Page not found".
  19. ↑ "Center for Public Integrity". Center for Public Integrity. Retrieved 27 January 2016.
  20. ↑ Monbiot, George (September 19, 2006). "George Monbiot on climate change and Big Tobacco". The Guardian. London.
  21. ↑ http://www.alec.org/about-alec/private-enterprise-board/

External links



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