Fri, Nov 23, 2001 page19

• Changing names getting awkward for Philip Morris

  • By Stuart Elliott / NY TIMES NEWS SERVICE
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  It could be a wake-up call for Philip Morris.

  Days after the Philip Morris Companies proposed changing its name to the Altria Group, a small company in Birmingham, Alabama, emerged to say that it has borne the Altria identity since 1997 and is unhappy about the potential confusion.

  Possibly more problematic for Philip Morris is the full name of the other Altria -- the Altria Healthcare Corp.

  "I almost couldn't believe it," Warren Smedley, the president of Altria Healthcare, said in a telephone interview on Wednesday, adding that, in his instance, the Altria name came to him after prayer.

  Smedley said he sent a letter to Philip Morris' lawyers asking the company to "do the right thing" and bring a "prudent resolution" to the situation. He declined to discuss what he would consider right or prudent; in other instances when a larger company wants to adopt a new corporate name that turns out to already be in use by a smaller company, the larger one often pays the other a name-rights fee.

  The dispute is indicative of the problems facing companies seeking to rename themselves as the demand for names increases with more corporate reorganizations and new products.

  "This happens a lot," said Alan Siegel, chairman and chief executive at Siegelgale in New York, a corporate and brand consultant, even when a coined word like Altria -- meant to suggest "altrus," Latin for "high" -- is chosen.

  When US Steel was renamed USX, he added, it found at least two other companies by that name in California and South Korea.

  Smedley provided a copy of a letter he said was sent to clients of his Altria, which provides services like billing and accounts receivable to hospitals and medical practices. "It is obviously of great concern to a health care business to have a big tobacco and alcohol company wish to adopt an identical name," the letter said.

  The reference was to the Philip Morris USA and Philip Morris International divisions of Philip Morris, which sell cigarette brands such as Marlboro, and the Miller Brewing division, which sells beer brands such as Miller Lite. Those divisions would keep those names if shareholders of Philip Morris approve the proposed name change for the parent at the company's annual meeting on April 25.

  In announcing the new name last Thursday, Philip Morris said the main rationale was to convey the breadth of its products beyond cigarettes and beer, among them packaged foods such as Kraft cheeses, Oreo cookies and Stove Top stuffing.

  "None of our operating companies are engaged in a business remotely similar to Altria Healthcare," said Mark Berlind, associate general counsel for the Philip Morris Management Corp division of Philip Morris in New York.

  Though Smedley "raised concern about being associated with tobacco and beer, the tobacco will still be produced by Philip Morris and the beer by Miller," Berlind said.

  In considering the Altria name, "we had done extensive searches," he added, "and several names came up" that were similar or identical.

  "We were aware of this company, absolutely," Berlind said, referring to Altria Healthcare. "But the question is if there is a similarity in the businesses, and the answer is pretty easy to give: no."

  "We will respond to the letter" from Smedley, he added, "but we don't see any problem or any conflict."

  Corporate naming experts said that while there might not be grounds for Altria Healthcare to complain on the confusion issue, it could have a case on the image front.

  "An alcohol and tobacco company is very hard to confuse with a health care company. But if I were a health care company, I might be worried my image would be smudged when a company known for not-healthy products used my name," said Clive Chajet, chairman at Chajet Consultancy in New York, a corporate identity consultant.

  "Imagine if Philip Morris found there was a company in Birmingham called Altria Funeral Parlors," he added. "Philip Morris would have a problem."

  While Philip Morris hired a New York corporate identity consulting company, Landor Associates, to develop Altria, Smedley said he "put the matter to prayer" and Altria was "the name that came to me."

  A spokeswoman for Young & Rubicam, the division of the WPP Group that owns Landor, did not return a call left on Wednesday seeking comment.
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