Description
Altria is an American corporation and one of the world's largest producers and marketers of tobacco, cigarettes and related products. It operates worldwide and is headquartered in unincorporated Henrico County, Virginia, just outside the city of Richmond.
Altria is the parent company of Philip Morris USA (producer of Marlboro cigarettes), John Middleton, Inc., U.S. Smokeless Tobacco Company, Inc., and Philip Morris Capital Corporation. Altria also maintains large minority stakes in Belgium-based brewer ABInBev, the Canadian cannabis company Cronos Group, and the e-cigarette maker JUUL Labs. It is a component of the S&P 500 and was a component of the Dow Jones Industrial Average from 1985 to 2008, dropping due to spin-offs of Kraft Foods Inc. in 2007 and Philip Morris International in 2008.
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, although that business has since been spun off. 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, 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".
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.
Philip Morris executives thought a name change would insulate the larger corporation and its other operating companies from the political pressures on tobacco.
The rebranding took place amidst social, legal, and financially troubled circumstances. 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.
In 2006, a United States court found that Philip Morris "publicly ... disputed scientific findings linking smoking and disease knowing their assertions were false." In a 2006 ruling, a federal court found that Altria, along with R. J. Reynolds Tobacco, Lorillard and Philip Morris were found guilty of misleading the public about the dangers of smoking. Within this ruling, it was noted that "defendants altered the chemical form of nicotine delivered in mainstream cigarette smoke for the purpose of improving nicotine transfer efficiency and increasing the speed with which nicotine is absorbed by smokers." This was done by manipulating smoke pH with ammonia. Adding ammonia increases the smoke pH, in a process called "freebasing" which causes smokers to be "exposed to higher internal nicotine doses and become more addicted to the product."
On March 30, 2007, Altria's 88.1% stake in Kraft Foods 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, 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.
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 Altria 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). This ended a short era of competition between the new Marlboro smokeless tobacco products such as snus, and those produced by UST Inc.
On December 8, 2018, Altria announced its intent to acquire a 45% stake in Cronos Group for $1.8 billion.
On December 20, 2018, Altria finalized the acquisition of a 35% stake in JUUL Labs, an e-cigarette company based out of San Francisco, California, for $12.8 billion dollars.[18] On November 3, 2019, it was reported that Altria was taking a $4.5 billion writedown on its stake in Juul, 35% of its original value.
