Henry Waxman: Philip Morris' Congressman on the Hill

Reason reports on the Philip Morris' working relationship with Henry Waxman for artificially high cigarette prices:

Waxman's bill, which has bipartisan support and a good chance of passing now that the Democrats control Congress, shows that politicians are happy to help big corporations hobble their competitors, as long as they can claim to be acting in the interests of consumers. This trick is especially easy in the case of tobacco, since its consumers are considered irrational by definition and therefore do not get to judge their own interests.

Waxman's bill would codify the advertising and promotion regulations issued by the FDA in 1996, when the agency was pretending it already had the authority Waxman wants to give it. (The Supreme Court disagreed.) Among other things, tobacco ads in publications read by minors would be limited to black text on a white background, as would tobacco signs in stores open to minors.

By impeding brand competition, advertising restrictions help keep market shares the way they are, which is fine—if you're Philip Morris. As an R.J. Reynolds spokesman put it, "If you eliminate ways to communicate with...consumers, that certainly benefits the market leader and makes it difficult, if not impossible, for those who aren't the market leader to compete."

As the biggest cigarette maker and the one that has been pushing and preparing for FDA regulation, Philip Morris is also best positioned to comply with the federal government's reporting requirements, manufacturing standards, and approval process for new products. Those demands will weigh more heavily on smaller companies, especially upstart competitors.

Even the more obscure provisions of Waxman's bill seem tailor-made for Philip Morris. For example, the bill permits menthol cigarettes, which Philip Morris sells, but prohibits various flavorings used by R.J. Reynolds.

The promise of improving "public health" by limiting competition should sound familiar. It was the rationale for the agreement that resolved state lawsuits against the major tobacco companies by creating a government-backed cigarette cartel designed to funnel money into state treasuries.

Henry Waxman: fighting for higher consumer prices and market share for tobacco companies.