"You can switch down to lower tar and still get satisfying taste," Merit cigarette ads assure smokers.

For decades, ads for Merit and other "light" and "ultralight" brands have all trumpeted their lower tar and nicotine numbers, citing official U.S. government rankings.

Now the Federal Trade Commission is preparing to overhaul the way tobacco companies must measure and disclose the numbers they use in cigarette advertising. Behind the FTC's review, which is expected in the next two months: mounting evidence that the government's system of measuring tar and nicotine doesn't come close to reflecting what smokers actually inhale.

The FTC's key new proposal would require ads to show a wide range of tar and nicotine levels, instead of a single, reassuring number. Moreover, the FTC would warn smokers that the actual tar and nicotine levels they consume depend entirely on their own smoking technique. For example, cigarette smokers, particularly those who smoke "lights," can "compensate" by inhaling more deeply, plugging up filters' ventilation holes with their lips or fingers or taking more frequent puffs.

"If people think that by smoking a cigarette with half the tar and nicotine, they can smoke twice as many cigarettes, then they are misusing the numbers, and we'll find a way to do a better job of letting them understand that," says Robert Pitofsky, chairman of the FTC. "The FTC will be looking at reform that alerts smokers to the problem of compensatory smoking."

With its projected rule change, the agency is finally acknowledging flaws in its measuring system that the $45 billion tobacco industry has long been aware of -- and successfully exploited. As early as 1974, a Philip Morris Cos. document titled "Some Unexpected Observations on Tar and Nicotine and Smoker Behavior" acknowledged that the FTC test results didn't indicate what people get from cigarettes.

The internal document obtained by The Wall Street Journal states: "Generally, people smoke in such a way that they get more than predicted by machines. This is especially true for dilution [i.e. low tar, low nicotine] cigarets." The report's conclusion: "The FTC standardized test should be retained: It gives low ratings."

Steven Parrish, Philip Morris's top spokesman, says the company believes the FTC test method is useful because it "provides a basis for comparison between brands," a point the 1974 document also stresses.

Another cigarette giant, B.A.T Industries PLC, also determined that smokers change their behavior to "compensate" for low tar and nicotine. In one B.A.T document detailing a Smoking Behavior-Marketing Conference held in Montreal in July 1984, Ian Ayres, group research manager, stated that B.A.T was exploring ways of "designing products which aid smoker compensation."

Joe Helewicz, a spokesman for B.A.T's U.S. unit Brown & Williamson Tobacco Corp., said the issues Mr. Ayres was discussing are "probably much more complex than are indicated in any single document."

Officials at several big tobacco companies play down the supposed phenomenon of "compensation." Philip Morris and RJR Nabisco Holdings Corp. have both offered the National Cancer Institute research to contend that low-tar smokers who "compensate" still inhale less tar and nicotine -- and they give up the "compensating" technique shortly after switching down.

An FTC overhaul would be the latest blow to the embattled tobacco industry, which is already under intense attack from state governments, plaintiffs' attorneys and the Food and Drug Administration. Among the leading brands that would feel the brunt of any FTC action is Philip Morris's Merit, whose ads carry headlines such as "Yes you can!" over pictures of exultant smokers who have managed to "switch down to lower tar."

Other big brands that take a similar tack include Brown & Williamson's Carlton, RJR Nabisco's Now brand, and True, sold by Loews Corp.'s Lorillard unit. In all, light brands make up almost half the U.S. cigarette market, while ultralights make up 12%, according to Wheat First Securities analyst John Maxwell.

Joel Cohen, a University of Florida marketing professor, recently completed a study suggesting that the FTC ratings do a poor job of telling smokers about tar and nicotine. Mr. Cohen's survey, slated to appear next month in the American Journal of Public Health, found that 56% of low-tar smokers incorrectly use the advertised tar numbers to make judgments about different brands' relative safety.

Top cigarette industry officials say the current FTC method does a good job of offering a benchmark for comparing brands, and was never intended -- by the industry or the government -- to mimic human smoking. If the FTC does change the method, they say, it won't necessarily hurt the marketing of low-tar brands.

"The idea that potential action by the FTC would undercut our light and ultralight cigarettes rests on a premise that our ads for these brands carry health claims -- and they don't," says Philip Morris's Mr. Parrish.

Industry officials also brush off the finding that smokers are ostensibly mistaking the FTC tar numbers for indexes of safety. "The tobacco industry has never made a health claim about lower-tar cigarettes, so if smokers are confused about the FTC rating, it's not because of something the industry has done and it's not for lack of a surgeon general's warning," says Brennan Dawson, a spokeswoman for the Tobacco Institute, an industry trade group.

For years, there has been a controversy over the smoking machines that industry testers, under government supervision, use to gauge tar and nicotine. The machine smokes at a steady rate of one 35-milliliter puff every minute. But studies cited in the 1988 surgeon general's report showed that, on average, people actually take one 43-milliliter puff every 34 seconds.

Moreover, public-health officials charge that cigarette merchants have devised ways to serve extra tar and nicotine without boosting the measurement numbers.

Among alleged techniques cited recently by FDA Commissioner David Kessler and others: Companies can increase the "burn" rate of cigarettes so the machine will take fewer puffs. But human smokers can compensate by simply smoking faster.

"Right now, the FTC method is as inaccurate as if the Environmental Protection Agency tested for mileage with cars just going down steep hills," explains Jack Henningfield, chief of the pharmacology branch of the government's National Institute on Drug Abuse. "What is proposed for cigarettes is the same idea as testing cars going down hills, up hills and in normal driving conditions."

The Tobacco Institute's Ms. Dawson says the industry's various manufacturing techniques aren't intended to "beat the machine." She adds: "There just isn't a way that a smoking machine can duplicate what car ads call `driving conditions,' but it does provide a relative ranking of where cigarettes fall in a standardized test of tar and nicotine yields that is descriptive, stands up and isn't skewed towards heavy pedals or light pedals."

Still, the FTC is awash in published studies conducted over the past 15 years that show scant relationship between a smoker's actual smoke intake and the numbers the machine registers.

One analysis, published last July in the Journal of the American Medical Association, said that all marketed cigarettes contain about six to 11 milligrams of nicotine, from which smokers obtain on average one milligram of nicotine. The report found that average was the same, regardless of whether the cigarette's official nicotine rating was 0.1 milligrams (a typical ultralight) or two milligrams (a full-flavor cigarette).

Ms. Dawson counters that there are studies that "find directly the oppositethat the FTC method is a reasonable predictor of nicotine intake."

Lee Peeler, associate director of the FTC's division of advertising practices, stresses that while the FTC isn't prepared to scuttle the smoking machine outright, certain features such as how deeply the machines inhale may be altered to more closely replicate the way people smoke. "The two things set in stone are that we aren't going to scrap the system, but we are going to fix it," he says.

Whatever the adjustments to the testing, the FTC's authority extends only to brands that list FTC numbers in their ads. Discount brands that don't advertise, about one-third of the entire U.S. cigarette market, don't disclose their numbers to the public. Nor does the FTC have the authority to force cigarette makers to list the numbers on cigarette packs.

How Low Is Low?

Some of the lowest tar U.S. cigarette brands as measured by 'smoking machine' under FTC method, based on 1993 data

                                        TAR         NICOTINE
     CIGARETTE BRAND (Description) (milligrams)   (milligrams)

        
     Carlton (king size, filter, hard pack, ultra light)
                                   Less than 0.5  Less than 0.05

        
     Now (100s, filter, hard pack)
                                   Less than 0.5  Less than 0.05

        
     Now (king size, filter, hard pack)
                                   Less than 0.5  Less than 0.05

        
     Bristol (king size, filter, soft pack, lowest)
                                          1              0.1

        
     Cambridge (king size, filter, soft pack, lowest)
                                          1              0.1

        
     Carlton (100s, filter, hard pack, light, menthol)
                                          1              0.1

        
     Carlton (100s, filter, hard pack, light)
                                          1              0.1

        
     Carlton (king size, filter, soft pack, light, menthol)
                                          1              0.1

        
     Carlton (king size, filter, soft pack, light)
                                          1              0.2

        
     Merit (king size, filter, hard pack, ultima)
                                          1              0.1

        
     Merit (king size, filter, soft pack, ultima)
                                          1              0.1

        
     Now (king size, filter, soft pack)
                                          1              0.1

        
     Now (king size, filter, soft pack, menthol)
                                          1              0.1