On the Call Lorillard Inc. CEO Martin Orlowsky

Source from:  Bloomberg Businessweek 07/28/2010

Lorillard Inc., the nation's third-largest cigarette maker, continues to hold an about 35 percent share of the U.S menthol cigarette market with its top-selling Newport brand, despite heightened competition in the still-growing segment of a declining cigarette market. Menthol cigarettes are getting a lot of attention as the U.S. Food and Drug Administration's Tobacco Products Scientific Advisory Committee looks at the public health impacts of the minty smokes, including among children and certain ethnic groups. The panel has held two sets of meetings on the issue and heard from the industry on scientific studies and its marketing information on menthol. More meetings are expected before the committee's March deadline to make recommendations to the FDA. While industry observers believe a menthol ban is unlikely, the FDA could take some actions such as different warning labels or reducing the amount of menthol in cigarettes. Lorillard has said it believes scientific evidence does not show that menthol cigarettes create greater health risk than nonmenthol cigarettes. It also believes that a ban on menthol would lead to a black market for contraband smokes that don't meet basic product standards. In a conference call with analysts Monday regarding his company's second-quarter earnings, Lorillard CEO Martin Orlowsky discussed the FDA panel's review of menthol. QUESTION: How do you assess your success rate so far to convince the committee that the science is inconclusive when it comes to menthol? RESPONSE: We didn't go into the process with a series of milestones for success or failure for that matter. ... We think we've made some very effective presentations of the information ... both in the science and the marketing areas. ... The questions asked by the panel clearly range across the full spectrum of both science and non-science. It's kind of difficult to sit there and sort of measure or determine based on what questions come up and attempt to read the tea leaves with respect to the implications of those questions. Enditem