PHILIP MORRIS executive apologizes for report outlining 'positive effects' of cigarettes

Thursday, July 26th 2001, 12:00 am

By: News On 6

NEW YORK (AP) _ Tobacco giant Philip Morris Cos. has apologized for a company-funded study that stated the early deaths of smokers is one of the ``positive effects'' of cigarette consumption.

``We understand that this was not only a terrible mistake, but that it was wrong,'' Steven Parrish, a Philip Morris senior vice president, told The Wall Street Journal in Thursday's editions. ``To say it's totally inappropriate is an understatement.''

The study by research company Arthur D. Little International concluded that the financial benefits to the Czech Republic government from duties and taxes paid by consumers, importers and tobacco businesses outweighed the costs of health care, lost working days and fires caused by cigarettes.

On top of that, it said, were the ``indirect positive effects'' of early deaths _ savings on health care, pensions, welfare and housing for the elderly. The government's net gain from the tobacco industry was $146 million, it said.

The study's conclusions were reported last week in The Wall Street Journal and since then have caused widespread buzz, eliciting response from columnists and television talk show hosts.

The incident has hurt the company's attempts to boost its reputation. It already has spent $100 million annually for positive advertising, donations and shelters for battered women to persuade the public it has changed its ways.

The company has canceled plans for similar studies in Poland, Slovakia, Hungary, and Slovenia, Parrish said.