Marketplace: News Archives

Friday, September 15, 2000
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It's Friday, September 15, 2000. I'm David Brancaccio.

Russians smoke an estimated 265 billion cigarettes annually. That's five a day for every man, woman, and child. Last year, some 63,000 Russians died of lung or throat cancer, 90 percent of which are linked to smoking, according to health officials. Now the Russian government wants US tobacco companies to pay billions to cover health care costs. In Moscow, Anya Ardayeva reports.

Ardayeva: The Kremlin lawsuit accuses the American companies of engaging in a marketing conspiracy designed to mislead the Russian people about the harmful effects of tobacco. It also blames the industry for Russia's failure to adopt stricter anti-tobacco measures. The claim, filed with the District Court of the State of Florida, is similar to the one made by American smokers in lawsuits that eventually forced the five biggest US cigarette makers to pay over a hundred billion US dollars in damages. But chances are slim that Russia will get any money from America's Big Tobacco companies. Russia is still one of the most smoking-friendly countries in the world. There are very few limits on smoking in public places, and cigarettes are on sale for smokers of any age. Experts here have expressed their concern about the suit, pointing out that foreign tobacco giants have poured much-needed foreign investment money into Russia's stumbling economy. They fear that instead of winning money for the Russian government the lawsuit could drive out one of the country's most lucrative sources of revenue.

And what's happening to all those used Firestone tires that have been caught up the recall? Turns out some enterprising folk have found a cheap, and dishonest, way to turn a buck with the allegedly defective rubber. And now, several state attorneys general are investigating. Marketplace's John Dimsdale has more on what appears to be a thriving gray market…

Dimsdale: At its fifteen hundred stores around the country, Firestone is collecting the used defective tires and shipping them off to rubber recycling centers. But since there aren't enough replacement tires to go around, Firestone is also reimbursing SUV owners who buy other brands from other tire dealers. That means some of the 6.5 million recalled tires have yet to find their way to Firestone. Several states are looking into reports that dealers are selling the used tires to people who take them down to their local Firestone dealer .. where they can get new replacements for free. The Tennessee attorney general's office ... where Firestone is headquartered ... says resellers of recalled tires are subject to civil penalties of one thousand dollars per violation. Sharon Curtis- Flair is the attorney general's spokeswoman.

Curtis-Flair: It's the attorney general's position that selling tires that have been recalled is a violation of the Tennessee Consumer Protection Act.

Dimsdale: The attorney general's office is investigating but would not comment on the extent of the tire reselling. Paul Peyrataud, the owner of Paul's Used Tires and Rims in Gaithersburg, Maryland says several people have come into his shop looking to buy tires that have been recalled.

Peyrataud As a matter of fact someone came in yesterday looking for four of them to trade them in at the store. And we said no way.

Dimsdale: Firestone says it is looking into reports of tire re-selling and plans to issue a response soon. In Washington, I'm John Dimsdale for Marketplace.

Product tampering nearly brought down the Tylenol brand back in the early 1980's-now bottled water seems to be the focus of a new wave of product tampering in the New York City area. Two people were hospitalized yesterday after drinking contaminated bottled water; no particular brand seems to be targeted. Officials say they've discovered several different brands tainted by either ammonia or sodium hydroxide. Though the FBI's been called in on the case, Marketplaces' Jessica Smith finds New Yorkers are viewing these incidents, as New Yorkers will.

Smith: In one instance, a thirty five year old woman bled from the mouth and esophagus after drinking Perrier at a Manhattan restaurant. A 50-year man reported burning sensations after drinking Aquafina brand water heĈd bought at a deli. And just last week, a sip of Poland Spring water, apparently tainted with lye or ammonia, sent an 18-month old child to the hospital. Before being treated for prostate cancer this morning, Mayor Rudolph Giuliani said yesterday not to panic.

Giuliani: This is not brand-specific. We have had three different brands... And at this points its too early to tell what kind of trend, or exactly what's going on.

Smith: An FBI spokesman called the situation "fluid" and said investigators are still talking to victims and vendors, to find out, where in the chain of supply, the water might have been affected. The City Health Department says its no longer dealing with the matter. And neither are most New Yorkers.

Angelitis: Customers are buying water like normal.

Smith: Agina Angelitis runs a busy food kiosk. [not far from the city Health Department]

Angelitis: ...and the only thing I heard about it was from one of my delivery guys. (asking a customer) Did you hear about the water. You did?

Customer: I know nothing.

Angelitis: Would you still buy the water?

Customer: Yeah, Sure cause I'm gonna buy it right now.

Angelitis: People are not afraid, in NY,. We are not afraid.

Smith: But officials are still warning residents to check bottled water for tampering or contamination. In New York, I'm Jessica Smith for Marketplace.

The pros will tell you that just when you think you have the markets figured out, they will go out of their way to confound you. Today, retail prices as measured by the Consumer Price Index fell a tenth percent, the first monthly drop for the CPI in 14 years. That sounds like inflation isn't a problem, doesn't it and, in theory, this is the situation where bond prices rise. In fact, the government's ten year note and 30 year treasury today dropped sharply, pushing up yields. Feeding into this psychology: fears of higher oil prices. More on that with stock broker and business analyst David Johnson later in the broadcast.

And that's the top of our news for Friday, September 15, 2000. Today the Dow Jones Industrial Average closed below 11,000 on a drop of 160 points, that's one and a half percent. The Nasdaq fell two percent. Details when we do the numbers.