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		This Philip Morris document from 1981 clearly shows that Philip Morris knew that teenagers used their product, studied it extensively and were worried about any decrease in youth smoking, since it would affect their future customers. When these documents were shown to Philip Morris CEO Geoffrey Bible at the Minnesota Medicaid trial, he said he was "shocked" by them.

The introduction shows that Philip Morris was worried about demographic trends showing decreases in youth smoking.

PHILIP MORRIS U.S.A.
INTER-OFFICE CORRESPONDENCE
RICHMOND, VIRGINIA

To: Dr. Robert B. Seligman Date: March 31, 1981

From: Myron Johnston

Subject: Young Smokers - Prevalence, Trends, Implications, and Related Demographlc Trends

For over fifteen years certain demographic and social trends have been moving in directions favorable to industry growth. Now, one by one, these powerful social and demographic factors are turning against us, and by 1985 all will be operating against us.

The trends are:

1. After increasing for over a decade, the prevalence of teenage smoking is now decling sharply.

2. After increasing for over a decade, the average daily consumption of teenage smokers is declining.

3. After increasing 18 percent from 1967 to 1976, the absolute number of 15- 19 year-olds will decline 19 percent during the 1980's, with the period of sharpest decline beginning in 1981.

4. Beginning in 1981 the absolute number of 20-24 year-olds (the ages during which average daily cigarette consumption increases most rapidly) will begin to decline, after increasing for the past 20 years.

5. For the first time in a decade of polling, average daily cigarette consumption as reported on the National Panel has declined.

6. In 1985, after declining for nearly a decade, the number of people in the age group most disposed to quit smoking (ages 45-54) wi11 begin to increase dramatically.

The inevitable outcome of these studies is that industry sales will decline. This is important, because tobacco executives have repeatedly testified to Congress that they do not market to children and that they do not need young people to start smoking. This document clearly contradicts that claim. These lies to Congress and the American people form the basis of the criminal investigation.

It is inevitable therefore, that industry sales will begin to decline within the next few years. Thus, Philip Morris USA can sustain its past rate of growth only by an acceleration of the rate of increase in market share. While this news is not good for the industry, I believe we can use these data and other data I plan to report on to good advantage in order to minimize the adverse effect on Philip Morris.

This report deals with only one of these trends--teenage smoking and attitudes toward smoking, together with related demographics. Subsequent reports will cover the social, economic and psychographic characteristics of teenage smokers and the demographics of other significant age groups.

Because the major data sources have just become available, and because of the importance of these data to the company, I have elected to report the data in a series of memoranda rather than wait and issue all of the material at once.

MEJ:yl

Attachments

CC: Mr. R. Thomson Mr. J. Zoler (HYO)
Mr. R. Daniel Mr. T. Goodale (NYO)
Dr. C. Levy
Mr. L. Heyer

1979 Special Programs

1. Resort coverage-in existence for eight years, this program represents a continuing brand presence among young adults. For two to three weeks during the spring and summer breaks the Sales Force promotes the brand heavily at POS. Marlboro T-shirts, visors, etc. are given away at the beach, bars, and other hang outs. No publicity nor outside visibility is desired. The program is expanding and in '79 will cover the New England Shore, Myrtle Beach, Texas, Padre Island, the Ozarks, Wisconsin and the Jersey Shore.

2. Summer Sampling. Approximately 150 samplers are dispatched to beaches, shopping centers, and other markets of opportunity. This program maintains a pressure on the marketplace.

3. Marlboro Chili Promotion. Would be conducted in April. This promotion is a joint POS and media event.

4. The Marlboro Cup. September 8th, will mark the 7th running of the Cup.

5. Marlboro Country Store. This is an ad which has run previously in 1972 and 1975. It is a spread , which offers 12-14 Western cowboy type items. It is a self-liquidator and is scheduled to run in October weeklies and November monthlies.

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