Czech Prime Minister Milos Zeman, a heavy smoker, once defended his habit by arguing that it helped his country’s finances. “As a smoker, I support the state budget, because in the Czech Republic we pay tax on tobacco,” Zeman said. “Also, smokers die sooner, and the state does not need to look after them in their old age.”

It somehow was OK--even darkly humorous--when Zeman made such a defense in his own behalf. But Philip Morris, the world’s largest cigarette maker, recently made the mistake of distributing a report in the Czech Republic that made those same arguments, opening itself to ferocious criticism from Czech media and U.S. anti-smoking groups.

In its most provocative calculation, the report said that by dying early, smokers saved the Czech government $30 million in 1999 because of reduced costs for health care, pensions and housing for the elderly. That figure reflected “5.23 years of life lost for the average smoker,” it said.

These “indirect positive effects” of smoking on public finances helped ease the much higher costs of smoking, according to the report, which Philip Morris used in a lobbying effort to influence Czech politicians and officials. In 1999, those costs included $296 million in additional health care for smokers and $29.6 million in additional health care for people sickened by secondhand smoke, the report said.


The report accepted the figure of “22,000 deaths due to tobacco smoking in the Czech Republic in 1999.”

A commentary in Mlada Fronta Dnes, a leading Czech newspaper, called the report “monstrous” and “extremely nasty,” adding that “in the United States they would not dare say anything like that even under a blanket.”

The Czech Republic is “indeed a happy hunting ground for ruthless predators such as Philip Morris,” the commentary added. “When in the mid-1990s it looked like the number of smokers might decline, they calmly focused on children. They convinced them that he who smokes is tall, with lots of muscles, and indeed American. That’s cool, isn’t it? Now Philip Morris went even further and went too far.”

Concerns about the health effects of smoking were slow to spread in Eastern Europe before the 1989 collapse of communism in the region, and the habit remains deeply entrenched in the Czech Republic and its neighbors.


Smokers make up about a quarter of the Czech Republic’s population of 10 million, and they consume more than 20 billion cigarettes a year, the newspaper Lidove Noviny reported.

Philip Morris commissioned the report by the consulting firm Arthur D. Little International, then distributed it after Czech officials complained that the tobacco industry was saddling the country with huge health-care expenses.

The report said that when the impact on government finances of all smoking-related costs, savings and tax revenues were added together, the result showed a net positive effect in 1999 of $151 million.

The Mlada Fronta Dnes commentary said it was as if the auto industry had claimed that the faster people drove, the more they would be killed and the more the state would save. It parodied Philip Morris’ position as: “Fantastic business proposal: Let’s together profit from the death of the citizens of your country. We shall kill them, and you will free our hands. Profit for both guaranteed.”


U.S. anti-smoking organizations also latched onto the report, saying it reveals the true face of Philip Morris. The Campaign for Tobacco-Free Kids in Washington has posted a copy on its Web site (https://www.tobaccofreekids.org).

Once the outcry erupted, it didn’t take Philip Morris long to realize that the report had been a big mistake. In a news release in late July, the company said the report “exhibited terrible judgment as well as a complete and unacceptable disregard of basic human values.”

The decision to commission the study was “not just a terrible mistake. It was wrong. All of us at Philip Morris, no matter where we work, are extremely sorry for this,” the statement said. “No one benefits from the very real, serious and significant diseases caused by smoking.”

The admission of error, however, didn’t do much to mollify critics.


“Philip Morris’ apology . . . can only be viewed as a cynical act of damage control unless the company also supports real change to reduce the deadly toll of tobacco,” said Matthew L. Myers, president of the Campaign for Tobacco-Free Kids. “Without action to back up its words, one has to question what Philip Morris really regrets: the report’s callous conclusions or the damage done to Philip Morris’ efforts to portray itself as a reformed, responsible company.”

Myers charged that in various countries, Philip Morris aims “to block effective government action to reduce tobacco use.”

“In the United States, these efforts include Philip Morris’ feel-good corporate image advertising . . . and its support for ineffective legislation to grant the U.S. Food and Drug Administration authority over tobacco products,” he said.

Vince Willmore, director of communications for the Campaign for Tobacco-Free Kids, said the group had heard about the report and then “tracked it down through [anti-smoking] advocates in the Czech Republic.”


“It is the bluntest admission we’ve seen by a tobacco company of the harm that tobacco products cause,” Willmore said.

“No responsible corporate entity would produce a report that basically brags about the benefits of killing its customers,” Willmore added. “Essentially, that is what Philip Morris is doing. . . . This is a warning to policymakers that Philip Morris hasn’t changed and can’t be trusted.”

The Philip Morris report came at a time when the Czech Health Ministry is proposing wide-ranging steps to combat smoking, including banning the sale of tobacco products to juveniles; outlawing smoking in post offices, banks and courts and at bus and streetcar stops; and prohibiting the sale of cigarettes at kiosks, restaurants, hotels and gasoline stations.

But Pavel Tautermann, who wrote to Lidove Noviny, was skeptical of the possibilities for change. In comments published by the newspaper, he argued that the report underestimated the government’s profit from tobacco.


“No state,” Tautermann wrote, “will give up an instrument which reliably kills people in the post-productive years.”

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Special correspondent Iva Drapalova in Prague contributed to this report.