America’s tobacco industry has a long, profitable history Virginia colonist John Rolfe (Pocahantas’ husband) produced the first commercial crop in 1612. In 1890 James Buchanan Duke founded the American Tobacco Company (ATC). A 1902 merger with Britain’s Imperial Tobacco Company created the British-American Tobacco Company (BAT). In 1911 the US Supreme Court dissolved Duke’s monopoly into several smaller companies, including R.J. Reynolds (RJR), Liggett & Myers (L&M), American Tobacco (AT) and Weyman-Burton. The other major tobacco manufacturers, Lorillard, Philip Morris (PM) and Brown & Williamson (B&W), formed in the 1930s.

Cigarette sales grew steadily until the early 1950s when stories about health risks to smokers proliferated. In 1964 the US Surgeon General’s report Smoking and Health concluded that smoking was a health hazard. In 1965 the US Congress began requiring the Surgeon General’s warning on all cigarette packages. The year 1971 brought a ban on broadcast tobacco-product advertising. By 1990 all interstate buses and domestic airline flights banned smoking.

The tobacco industry reacted to these changes by diversifying and expanding internationally. PM, manufacturer of Marlboro and Virginia Slims, led both trends. Its major domestic purchases included Miller beer, General Foods and Kraft. RJR, manufacturer of Camel, went into foil products, oil and food operations. In 1986, the company became RJR-Nabisco. AT, maker of Pall Mall and Lucky Strike, diversified into liquor and golf brands, changing its name to American Brands in 1969. American Brands left the tobacco business after B&W bought Gallaher, its cigarette division, and changed its name again to Fortune Brands in 1997. Still controlled by parent company BAT, B&W, maker of Kool, diversified relatively late. Its acquisitions included the elite retail department store Saks Fifth Avenue. Lorillard, maker of Newport, was purchased in 1968 by the Loews Corporation, which also owns insurance company CNA Financial Corporation. L&M, maker of Chesterfield and Lark, successfully diversified into petfood products and alcohol, becoming the Liggett Group in 1964. In 1980 Grand Metropolitan Limited took over L&M, reducing its presence in the tobacco industry.

These changes reduced the original “Big Six” cigarette manufacturers to the “Big Four.” Meanwhile, chewing tobacco manufacturer United States Tobacco (formerly Weyman Burton), producer of Copenhagen and Skoal, branched into wine, cigars and entertainment programming.

The tobacco industry faced increasing legal pressure in the 1990s. In 1994, led by Mississippi, the states began suing the tobacco industry to recoup tobacco-related Medicaid costs. In October 1996, Congress passed the FDA (Food and Drug Administration) rule to regulate tobacco, especially sales and marketing aimed at minors.

Liggett also broke ranks with the industry in 1996, eventually settling with five states over Medicaid suits and releasing internal documents. In 1997 the industry negotiated a national tobacco settlement with the state Attorneys General, prompting Congress to consider legislation to regulate the industry. Further suits and strategies continue to challenge the industry in the US, including a $145 billion judgement in Florida (2000) against these manufacturers.