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US cigarette trial focuses on danger of `light' products

Philip Morris USA will try to persuade an Illinois judge to reject a claim that the tobacco company deceived customers by advertising "light" cigarettes as less dangerous than its regular product.

Closing arguments in the first class-action trial over light cigarettes will begin Monday, where smokers claim Philip Morris, a unit of Altria Group Inc, lied about the products' health risks and should pay more than US$7 billion in damages. Analysts have been pessimistic about the tobacco company's chances before Judge Nicholas Byron, who will decide the verdict, and worry that it would be difficult for the company to post a bond of billions of dollars.

"There is a decent probability that the judge rules against Philip Morris in this case and the damages could be in the tens of billions of dollars," wrote Salomon Smith Barney analyst Bonnie Herzog in a report.

Philip Morris shares, which have fallen 34 percent in the last year, fell US$1.46 to US$35.82 on Friday on the New York Stock Exchange.

"Class actions scare investors to death," said Timothy Ghriskey, who holds Altria shares in his US$100 million fund at Ghriskey Partners LLC. "Will the stocks react negatively if the case goes against them? Yes. And it has been reaching to that already."

Philip Morris said that it never claimed that the light brands were safer than other brands.
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