By Al Lewis
A DOW JONES NEWSWIRES COLUMN
December 13, 2011
Patrick Reynolds, grandson of tobacco magnate, R.J. Reynolds, says no price increase, no tax increase, will release tobacco’s addictive grip altogether.
A pack of smokes can cost nearly $11 in New York City, and often more than $6 in other parts of the country. Now, the three biggest tobacco makers are raising prices for the second time this year.
Reynolds American Inc. (RAI) and Altria Group Inc. (MO) are going with 5-cent-per-pack increases, and Lorillard Inc. (LO) is going with a 6-cent hike.
“Some smokers are entrenched,” Reynolds said in a telephone interview. “They’re not able to stop. They’re going to go on spending that money on tobacco.”
Typically, the tobacco giants cleverly time their price hikes with cigarette tax increases so customers blame governments more than them, Reynolds said.
This year, such tax hikes have been muted. But tobacco companies raised prices anyway. They have, after all, racked up hundreds of billions of dollars in litigation costs and settlements over the years.
Why not charge $20 a pack? Some studies show that nearly 20% of smokers continue their habit even after contracting lung cancer. Anyone willing to pay with their life is willing to pay anything.
Nevertheless, steeply rising prices — thanks in large part to taxes and litigation costs — have helped pushed the ratio of Americans who smoke to below one-in-five for the first time in decades. In most other parts of the world, it is still one-in-three.
Reynolds has long lobbied for tax increases, smoking bans and advertising that illustrates the health risks. He’s also made his living as a paid public speaker with a life story that has more sins-of-the-fathers themes than Shakespeare.
Reynolds’ father, R.J. Reynolds II, lived fast with the tens of millions he inherited, marrying and divorcing several times. When Reynolds met with his father after not seeing him for years, his father had a sandbag on his chest, hopelessly treating his emphysema.
“He was still smoking, too,” Reynolds said.
Reynolds was disinherited from his father’s will when his father died in 1964. He did, however, inherit $2.5 million from his grandmother when he turned 21, according to the Associated Press. He eventually sold his tobacco stock, and in 1986 he found himself before Congress advocating for higher tobacco taxes to curb smoking.
“My family gave me some grief, to be sure,” he said. “They didn’t take kindly to my anti-smoking work. Nor did they take too kindly about the book I wrote about my family.”
“The Gilded Leaf,” published in 1989, told the unflattering tales of three generations of the intensely private Reynolds family. “The money twisted, if it did not directly pervert, everything and everyone it touched,” Reynolds wrote.
Reynolds said he is no longer wealthy, and counts himself better off for it. He knew his family was part of a declining old-money class and not part of the rising business class. He also knew the old money came from a product that kills people.
“They say you find your calling in your deepest wound,” said Reynolds, “just as the ex-alcoholic becomes a good speaker on alcohol, or the ex-drug addict becomes a good speaker on drugs. Losing my father was my deepest wound.
“When I began, my family said, “Oh, you’re going to be an embarrassment. You’ll drive the price of the stock down.” “We had some heated discussions,” he continued. “But in the ensuing years, since 1986, the price of the stock kept going up. And as far as being an embarrassment, I received an award from the World Health Organization; I brought honor to the Reynolds family.”
Reynolds says he is now looking for a sponsor for a world tour. He’s already been to Greece to help its government with anti-smoking initiatives. He’d like the rest of the planet to catch up with the U.S. He says at least a billion people are now on track to die from tobacco-related illnesses. “As a Reynolds I have a great platform to make a difference,” he says.
At 63, Reynolds has come to terms with disillusionment over his grandfather’s empire, his anguish about his father, his anger at being disinherited, and his struggles with all the dysfunction that one can imagine in a tobacco-rich family.
His siblings no longer chide him for becoming an anti-tobacco advocate. That’s because, except for one half-sister, they are all dead. His oldest brother, R.J. Reynolds’ III, died, predictably enough, from the family curse in 1995.
“I have a list of all the Reynoldses that died from smoking,” said Reynolds, who has had to kick the habit himself. “I’m only the one who made it.”