CD BAT Industries document for Province of British Columbia 25 October 1999 (~- ~- (J-,---S ~ ;17\ ~ I-- ( -~, f I- rll~ C7-1 cc r1 _1 N.) BAT Industries document for Province of British Columbia 25 October 1999 I 1.) ,c) I 4, r") C) C-- C14 U~ r1 j C.14 BAT Industries document for Province of British Columbia 25 October 1999 zc- -.2- 91 2 21 .kN 2--~ 2,'1 Cx) Cf4 BAT Industries document for Province of British Columbia 25 October 1999 I tobaccoStrategy Review Team Agenda for Meeting on Thursday, 30th May 1991 Hinutes of meeting held on 27th February 1991. ?rogress on items not on Agenda:- (a) Allocation of Charges for Fundamental Research (MFB). ~b) November marketing Seminar (R.JP/MFB). 3. Sales/Marketing - General issues- (a) Improved Information Systems (BDB). (b) Brand Integrity (BDB/RJP/UP). (c) Sponsorship (BDB/RJP). (d) PM/RJR TMD Initiatives (R.JP). US International Brands (RJP):- (a) Progress/Plans. (b) Kent Leisure ?ackage. (c) Plans for Barclay. UK Internati-al Brands (BDB):- (a) Progress"Plans. 11 b) Promotional Spend vs. Market Potential. Market Representation:- (a) Ch i na ( 13DB / R_7P) ( b )Ocher "Orkets 7. Ne. Markets:- Eastern Europe (BDBi1'J11) I (b) Other Ne, Harkers (BDB,!RJP) . 5 ~. Export Sourcing tMFB). 9. Manufacturing Capacity/Plans:- (a) Germany (UH). (b) Group keiew (RJP/EEK). ~_e a E: Review of Rationalisation Scheme (RJP). 11. Human Resource Issues:- Ca) Review of Training & Development (MFB). ~b) I~ter-Co.pany Transfers (BDB). (c) Enhanced Recruitment (UH). 12. Review of Trading Results - 1st Quarter ane April (All Members). 13. Regulatory Issues:- 'a) Environmerital Charter (MFB). (b) Smoking Compendium (BDB). (c) Enviromental Tobacco Smoke (RJP). (d) Fire Safety (RJP). (e) Additives Register (BDB). 14. Product/Process Development:- [\j (iD (a) Sidestream Smokt~ (BDB/RJP/UH). (b) Y-1 Tobacco (BDB/RJP/UH). co (c) Ammonia Treatment Decomposition Products (BDB). (d) Reconstituted Stem (BDB). RS,'D JA Bt~ March 199L BAT Industries document for Province of British Columbia 25 October 1999 N-0 -COPIES MAY BE _V_kDE Tobacco Strategy Review Team A mee~.ing ot the --)bacco 2-trategy Review Team was held o-. 27th Februa-Zy 1-99". Present Sir ~~r. '.'.r. Dr. Una'Lle .c. be prQsen-- ~tr. in A::tendan~:e Mr - Patrick Shee~.y, Mr. M.F. Bro-.ighrori, B,.D. Bramley, Mr. R.J. ?rit--nard, ;. Herter, Mr. ?.J. Rombau~, R. Salter (Secretary). J.L. Merci r e T.A. ~7ckmann 1. -he minutes of- the meeting held on 30th November 1990 were agreed. 2. Contributions to Research Programme : Mr. Broughton reported that he "'ad not: yer- completed the work to ensure that the research programme was funded in a way that was :ax-efficienr and which also tooK into account the need to maximise UK 'income. He will report back on this at the next -meeting. 3. Management Development : Mr. Broughton reported that Mr. Ross 1-obacco) and Mr. ',,'illia-xs (Financial Services) hac been seconded to ,-he project to review the arrangements for management training and ~evelopmenc. Tne project has been accelerated and -is now due for completion by en~-Iuly. Progress will be reDort:ed at the next meeting. 4. Inter-Company Transfers : Mr. Bramley reported tha:: there has been 3 -.ransfers since the last meeting. A full review of progress during the vear is scheduled for the September meeting. Increased Recruitment : It was noted -hat the need to appoint management teams for the activities being set up in Eastern Europe and ot'ner new markets had exposed a weakness in the limited availability of candidates for these posts. It was agreed that Mr. 'Herter would se~ up a project with Mr. Bramley and Mr. Pritchard, to investigate the extent of --his problem, Group-wide, and to recommend how it could be ameliorated. Dr. Tioris Andr6 will be secretary to the project. 6. Review of Manufacturing Capacity : Mr. Pritchard reported that Mr. Earl TZohnhorst had initiated the project to establish the current and potential manufacturing capacity in the Group, to establish where shortfalls may occur and to determine where there is a potential for expansion or other changes to improve the overall productivity, cost-effectiveness and tax-efficiency in sourcing the Group's -.-2arkets. was noted that the project team was due to meet on 5th-6th March and it was suggested that ~Ir- Lord, Mr. Bannister and Mr. Saboia should be invited to join the team. 8. It was also suggested that the team should consider the potential for using, in Brazil or elsewhere, soft cup and other machinery which had become surplus following the expansion of box packaging and other _~pgradin_- at Macon. 9. Other relevant work in hand is a study by Mr. Herter of the expansion porential of Bayreuth and a study by Mr. Broughton of the optimum ~;ourcing of exports. All of -this work is due to be reported in May. cy" BAT IndustrieS document for Province Of BritiSh Columbia 25 October 1999 10. Information Systems : ,~r. Bramley reported progress on :he project to ensure that figures for cigarette saies could be accessed easily by all the Operating Groups In a form wnich was of most use to everyone ,ho needed to use them. -lie Chairman asked that the system should be capable of showing total sales to a country (inclu6ing sales to Duty Free) from all. Group sources and that there should be a clear understanding and agreement between the Operations on the conventions to be used to calculate total sales unc~er each heading (e.g. Sales of a specific International Brand worl.4wide). 11. --t -.,as noted that Mr. Bramley would send proposals to Rr. Pritchard and :-1r. Her-.er in Yarch and would report at the next meeting on progress tow-ards developing a system which was comprehensive and which zould be accessed freely throughout the Group. 12. Brand Integrity : It was noted that following the Chair-man's note dated 3rd January, there had been increased pressure to ensure that .here was a high degree of uniformity in the composition and promotion of international Brands worldwide. The importance of ensuring that all brands are equal to or better than competitive brands was again stressed and it was suggested that the US Trade Office should be used to put pressure on countries to relax requirements ror the use of local leaf where these are still in forze (e.g. in Malaysia and 7 enezuela). 13. it as nosed that BAT Espana had undertaken to take their Lucky Strike blend fr:):r Brown & Williamson. The Chairman of the local company will a so be asked o support the case for using more imported leaf in order to upgrade the quality of the cigarettes. 14. 7~e C-airman asked 'Mr. Bram'--ey to confirm that there was no legal requirement in Spain to use local leaf and stressed again the importance of insisting that the quality of Lucky Strike should be comparable or better than Marlboro and Chesterfield. Also, that there was zontinuing pressure to LDprove Belmont and Royal Crown, the zurrent objectives for which were thought to be too unambitious. 15. 1-- was noted that the distribution in Spain for Lucky Strike was inadequate for a brand which had a 3% market share. 11r. Bramley was asked to consider how this might be strengthened. 16. Elsewhere, Argentina had now agreed to conform to Brand Owners' specifications and Denmark had agreed to use the same Lucky Strike blend as Germany. It was also noted that the current blend for Benson & Hedges in Malaysia, incorporating 60% local leaf was considered to give a cigarette of acceptable quality. While welcoming this, the Chair-man suggested that Malaysia should still keep up the pressure and should look at blends with 50'% or less of local leaf. 17. The Chairman also suggested that there should be continuing pressure to improve quality in Yugoslavia and in Players Gold Leaf, worldwide. CD 18. US International Brands : Mr. Pritchard reported that although the budget for 1991 showed only a 7.9% increase, the forecast for sales to China was conservative and it was hoped that actual sales would show a growth rate closer to the 15% target. Box capacity should be adequate (_,-J by mid-year and would be an important factor in supporting sales. BAT Industries document for Province of British Columbia 25 October 1999 19 . It was noted that there were still ---icons -is t er-c ies between BATCO. and 3 rovn & Williamson sales ~4gures bur was hcped that these would be resolved before the May meeting. 20. Iraq : Fol'o-ing the end of the war --ith Iraq, 4-t was suggested that immediate cons iderat-_'on should be given to possible ways for establishing brand goodwill in this market. '-I. Colombia : It was noted L-,at although there was a high level of tax, imports into --olombia were now allowed. As a result, it should be possible to establish brand presence in the market. 22. KENT : It was noted that -.he Kent TOT in Europe had highlighted the problem that the promotion and packaging projected an English image which was not helpful for an American cigarette. Various ways to produce a more American image were suggested including manufacture in the USA (but thought to be uneconomic); emphasising on the packaging that it was an American-style cigarette; using a European advertising agency to vive a "Huropean image of Americaness; and --oncentrazing an markets such as France and Italy where there were severe restrictions on adver,.ising. 213 It was noted that work. was continuing to develop a suDerior Kent Lights -product and to cop._,'_Jr-m the agreed packaging formats. It was also noted L.-Iat Germany will test market Kent Lights in the 3rd Duarter. 24. Kent remains progressive in China. Following the solution of the ~-_-'pping problem and the cutting off of parallel supplies through ~Jruguay, it is hoped tnat sales to China will exceed budget in 1991. 25, It was noted that Kent continues to be a key --nternational brand for the Group. Mr. Pritchard w-~Il report on the )lans for the Kent Teisure Package at --he May meeting. 26. LUCKY STRIKE continues to be progressive and a key objective for 1991 will be to expand 1,uaky Strike Lights, introducing the brand into as many markets as possible as a direct competitor to Marlboro Lights. It was agreed that there should be a determined campaign for expansion based on Lucky Strike Plain, Filter and Lights versions with Lucky Strike Super Lights available if required. However, it was thought that having Lucky Strike Hilds as well as Lights was confusing to the consumer. it was suggested, therefore, that ~:he current policy to promote Lights and to let M-ilds find their ourn level should be modified, with greater effort being applied to converting Mild smokers to Lights. 27. It was agreed that it would be helpful to acquire from Gallahers the rights to sell Lucky Strike in France and Mr. Pritchard will estimate ')y end-March how much this could be worth to 3AT. Once this has been agreed, Mr. Br3mley will open discussions with Gallahers to discover whether they are prepared to sell for cash the rights to Lucky Strike in France. 28. Since a possible counter-offer may be to exchange Lucky Strike for Benson & Hedges in Europe (which to be acceptable would have to exclude Duty Free and include the rights to continue licencing, the product for Geroany), Mr. Bramley and Mr. Herter will assess the value -If this brand. rll_ Ci~ cz. BAT Industries document for Province of British Columbia 25 October 1999 29. It -,as noted rhac ~'-e salesforce in Brazil are enthusiastic about the success Lucky Stri',~~e Ls achieving in direct competition ith Marlboro. IL is also hopecl '-c launch in _'hile ahead of Marlboro. It as agreed thaL there should be continuing pressure to raise prices w4 L'n the aim of coming close to, matching or even exceeding the Marlboro price in as oany markets as possible. I BARCLAY : It was n:)ted t',,iat the version of Barclay rated at 2mg was dcing well in Switzerland. However, it was also noted that despite the difficulty of verif7,7ing the rating in laboratories (and the lack of taste), Philip Morris were continuing to promote a lmg cigarette in several key markets. It was agreed, therefore, that in addirion to launching the new 2mg version, there should also be a lmg version available for launch if required. 32. There is a continuing need to reposition the original Barclay 'IrDg' product as a 5mg product and to time this repositioning correctly in relation to the launch of the new 2mg product (and potentially also in relation to -he launch of the new 1mg product). 33. It was agreed that 'it. Pritchard would present an overall strategy for Barclay a: the 'Hay meeting, including the plans for the 9mg, 5mg, 2mg and 1mg versions. It as noted that --;espiLe a disappointing reception in the Japanese market overall, Barclay had been successful in some segments and was therefore Deing persevered with, with a view t~ the long term. CAPRI, VICEROY and KOOL : It was noted that Kool was showing some vitalitv in Far East markets. A more detailed review of Kool and of the other two brands is scheduled for the May meeting. 36. UK International Brands : Mr. Bramley reported that Benson & Hedges had stabilised and was looking to increase in 1991. State Express 555 remained progressive, especially in the Far East, and PGL was also progressive. JPS was budgetted to increase in 1-991 after experiencing only a slight decline in 1990, compared with a much greater decline in !989. 3-1. It was noted that ~Ir. Bramley would bring together Mr. Brookes, Mr. Crichton and Kiss Osborne for a meeting to review the overall strategy for the promotion and development of UK International Brands; confirming the positioning and potential of the individual brands (including SE 555 builds); and discussing the relationship between the promotional spend and the market potential for each brand. 38. Eastern Europe : 11z. Herter reported that excluding East Germany which was now included in the total German market, Group sales to Eastern Europe and the USSR increased from 1.7 billion in 1989 to 2.95 billion in 1990, with exports increasing from 1.1 billion to 2-2 billion. r\j CD 39. The Chairman stressed the need for Mr. Herter to proceed with urgency on the appointment of representatives in Bulgaria and Yugoslavia and to complete the market study in Czechoslovakia. Obtaining good information was an essential precursor to identifying and evaluating opportunities within Eastern Europe. N) BAT IndustrieS document for Province of BritiSh ColUmbia 25 October 1999 0. It was noted that Lhere had been continuing progress on negotiations -,,7hicn zou' d lead to join: ventures in Hungary and Poland. 7he Chair-man will discuss with 4r. 3ramlev and Mr. i~erter how these projects should be managed. It was suggested that the possibility of recruiting ?olish speakers from the USA should be borne in mind. ~1. It was nc:ed that Brown & Williamson would complete a survey of the Romanian marke-~ by the en~ of April and would r,port on the potential 3f --he market at the 'lay meeting. Current sales were `iandled through 29 independent distributors and were for full margin products onlv. '2. In the USSR, it was hoped -.o finalise the choice of an office in March. Group companies were continuing to pursue import opportunities within the price and brand parameters which had been agreed. However, swingeing increases in import duties and the general disorganisation within !ihe country made it difficult to build up stable trading relations`iDs. ~3. Leaf Advisory Team : Mr. Bramley reported that ~Iie Leaf Advisory Team 'nad completed an init:4al survey of 1,eaf growing in Poland, o the conclusion that whereas it Hungary and Bulgaria and had come t might he comparatively easy to effect improvemen:s in Poland and Hungary, more radical changes to the systems might be required to bring Bulgarian production to a satisfactory standard. '4. - It was agreed that an important element of any investment proposal in Eastern 7-,=ope would be to determine the type o-- cigarettes to be made and to assess the improvements to leaf quality that would be needed. The pro2osaL should -.hen include appropriate recommendations for the team recu-'red. (e.g. an agronomist and a blender , in order *:o achieve the required improvement. 45. Other New Markets : Mr. Pri~:chard reported that ~he leader of the coup in Thailand had been a strong supporter of the national monoT)ol-,,. Therefore, there was unlikely to be an improvement in the currents situation where although imports were a'-lowed, the lowest praztiaai price at which these could be sold was 40 baht compared with 15 bah: ~:)r local cigarettes. 46. Mr. Bramley reported that BATCo. now had an import licence for Mexico and would be bringing a project to the CPC proposing a re-opening of the market. There had been no significant new developments in Turkey or in Burma and Vietnam. However, it was hoped to have the position on SUTL clarified further before the Chairman's visit to Singapore in June. 47. Brazilian Exports : It was noted that Souza Cruz had exported 70 million to Poland in 1990 and was hoping to increase this to 700 million in 1991. Other markets were also snowing significant r\.) growth. The Chaiman emphasised the need to build up a stronger CD organisation overseas and suggested that training for the people involved could be provided through BATUKE. cc C:D BAT IndustrieS document for Province of BritiSh C01urnbia 25 October 1999 5. Rationalisation of overseas Representation : Mr. Bramley reporre--~ that there ~,;as a programme in hand to strengthen the ~,roup's representation in overseas markets and to ensure that where there as as more than one Croup company represented in a market, consideration w being given to the potential benefits of sharing facilities aud people. A new office had been opened in Greece, facilities in Thailand and Taiwan had been rationaLised, Korea was under discussion and UAE, Saudi, Rong Kong and Barbados were also under review. ,9. It --~;as noted ::hat Mr. Bramley and Mr. Pritchard would report in Hay on the results of the study set up to determine -the optimum structure for serving the China market. 50. JT1 : Mr. Bramley reported that JT1 had increased their sales to the South East Asian markets by a substantial amount. There had been a suspiziDn that they had been dumping but further investigation had not substantiated this. Their activity as compaticors will, however, continue to be coni--ored closely. General Hanagers Marketing Seminar : Mr. Pritchard and Mr. Eckmann rep3rted that it was hoped to make a final recommendation for the location -:or the conference bv end-March. It was agreed that of the locations w-iich had been considered, Orlando, Florida appeared to have most to recommend it. Although the dates provisionally agreed for the seminar had been 24th-29th November, -.his had now been found to be -,mDracticable and, subsequent to the meeting, revised dates of 19 t--23r-4 November were agreed. -1 r. Ferter 'Excise Structures), Mr. Bramley (Brand ~;oodwill) and Mr. Pritcnarc~ (Cost-Effectiveness of Promotion and Distribution/ Trade Relations'nips) confirmed that the preparations for their respective sessions were going ahead. 'fr. Herter will circulate a paper on excise before the seminar to enable delegates to prepare their own contributions. Mr. Bramley asked for examples of the impact of quali--~ on brand goodwill and it was suggested that Brown & Williamson might be able to provide help on this. The Provisional list of partici?ants to the se=inar was confirmed as follows:- Brown & Williamson Sandefur, Whitehair, Schoenbachler, Fitzmaurice So~--a Cruz Castro, Andrade Imperial Brown, Lee BATCF Schweitzer, Tomat BATCo. Brookes, Hazel, Watterton, Ross, Bruce-Miller, Grant, Tandrup, Freire, Viner, Wurmser, Arnold, Laux, Edmunds, Chugh, Borloz, McDowell, I-Latamaros, Hahn. Changes fr om the previous list were the substitution of Laux for Stephenson and the addition of Hahn. Rose, Stuart and Bootalingam had C-- b-n delet ed from the original list but were still considered as po6sibles. Mr. Broughton-As asked to review and report back on other U, potential candidates for the seminar, which was designed Eor younger general ma nagers with top-management potential. Subsequent to the meeting, P . Dunt and P. Brooks were ~3uggested ~V~ossible additions t o the list. ' BAT IndustrieS doCUrnent for Province of BritiSh Colurnbia 25 October 1999 Technical Liaison Meecings : Mr. Bramley presented a review of the ~ecnn'cal L'aison meetings held i~ '_989 and 1990. It was agreed that -~_le the Tobacco Strategy Re,:--'ew Team wished to encourage the lr~terchange c-' infomation and expertise by individuals, there should be ~i re3uz-_oT,. in the frequency of general meetings invclving large Li~.Ders. or people. It was suggested that when general ii~eetings were -he aLn should ~)(~ to limit the attendance to the chairman of the plus ine representative from each operation. It was also ag:-ee6 that the frequency of these c-eneral meetings should be reduced a Research Policy Croup/Progress Review Fundamental Research - Combi-d ~~nnual Meeting. Scieritif_'c Research Group - Anr~ual- 'roduct Development Croup - Every Second Year. 1 ~.,k.h.ps, etc. - Only 1-re initiated or agreed by the Strategy Review 7eam. ~5. Leaf Supplies : It was confirmed t.~at Leaf supplies were 17' ely to be sev-ely restricted worldwide in '991, with Burley in particular in short 51pply. US prices were expec:ed to increase by 5Z and greater F.r- i'creases were expected ~or -pplie,s from B-,a.il, Argentina and 't was also expecce~ that -he EC stockpile of 300 million -uld be run down and that the pressure on Leaf prices would embarrass cwparies who had commitred ro supply low price cigarettes to -'ie USSR. 56. Pritchar-_J, Mr. Bramley and Mr. Herter confirmed that supplies had been secured for 1991 and that the likely swing in the pendulum in as curre~,t shortages encouraged more -planting, had also beer. _-~. a,c~,unt. ;7. Mr. Romraut reported that Souza Cruz were still behind on durations a- it ,~as agreed that 't was important to talk to the Brazilian G,3'.-ernment about how increased Leaf production could be encouraged. ,he aiz should be to increase Leaf production by 15% and Mr. Rombaut was asked to report to the C"nairman how Souza Cruz would attempt to encourage this. 58. Environmental Tobacco Smoke : Mr. ~ritchard reported that the two draft reports by the US Environmental Protection Agency on Health Ef~ects of Passive Smoking and Environmental Tobacco Smoke in ...orKplaces -e still under review bv the Government's Scientific Ad,isory Board (SA.B). Brown & Williamson believed that the Tobacco Industr,, representatives were managing the issue satisfactorily and that no further initiatives were called for at present. However, this wou-1 ')e kept under review. 59. Fire-Safety : Mr. Pritchard reported that a Congressional committee had concluded that it was technically possible to produce a seLf-extinguishing cigarette and had initiated further work aimed at drafting legislation to specify this as a requirement. However, the C:~ -iiinimum period required for the further testing which would be necessary prior to framing the legislation would be three years. Cu7rent indications -ere that further problems had arisen in defining a valid terr ~or a self-extinguishing cigarette and progress appeared likely to be slow. However, this would continue to be monitored. BAT Industries document for Province of British Columbia 25 October 1999 ,-~O- Environmental Charters : Mr. Broughton reported that the Incernational Chamber of Commerce had put forward a Charter of Environmental Principles to which companies would be invited to give formal support. This was similar to the Valdez Principles presented at the last meeting but was more pragmatic, seeking steady improvement rather than setting absolute standards. Since it was also supported by a body ith more standing than the CERES pressure group, who were promoting the Valdez Principles, it could gain more support than the very low level ~c'nie-!d by CERES. ;1. 'lie current view on the ICC Charter was that al:hough tie wording of paragrapns 6 and 7 of the Principles, on Products/ Servizes and Custo-,Der Advice, -night raise difficulties for a Tobacco company, qualified acceptance of -,he Cliarter might be desirable. Companies would be asked to consider, with their legal advisers, whether :hese paragraphs could be redrafted in a fom whi:h would be acceptable to a Tobacco company. c.)2. It as noted that there could also be a requirement For independent environmental audits and Mr. 3roughton would discuss with companies how these might best be carried out. r) 3. `~r. 3roughron will write to companies separately regarding :he whole. questLon of Environmental Dolicy, which is a'-so due ~'or review by the B.A.T '-nduscries Board in October '991. 6 3. Smoking Compendiums : Mr. Braley reported that the Smoking Comoendiums would be updated by end-April. Sidestream Smoke : It was agreed that although -.here were doubts about L~e poLent-:al for promoting reductions in sidescream smoke as a selling point, there should still be formal o Io3eccives ~o reduce visible sidestream smoke from Group produces- It was asked thaL companies should appropriate objectives into their product dev-21opment and qua!-:L-11 control programmes. Additives Register : lir. Braley recorted that the Addi-i~es Register was almost zompli~te and would be zirzilated later in thf2 year. 45. Blenders Handbook : Hr. Pritchard circulated copies of -he Blenders Handbook to members. 6'. Y-1 Tobacco : It was reported that ork to incorporate Y-1 blends into low-tar cigarettes was continuing, including its use in the forthcoming trial of Barclay in Nor-,ay. Members were asked to report progress at the next rueeting. 68. Reconstituted Stem : it was noted that work to increase the use of reconszit~ted stem is c~)ntinuing. 1: as agreed that this should be p-ucd wish the biective if -Daking full ~-a of ~he poLential for imprc~e,Dent :)fferod by this process. 7 zJ. Ammonia Treatment : :t as noted t~.a~ ~he cork -D characterise the Jecomposition products of cigaret~ es containing ammoniated toba cco was conii:iuLn, . and ~~aL L~ie r,35ults o' ;orl,-- would be reported in r1 l) S-,teuDer. :-1r. Bramle,,, was asked ::o ~ nsure that products from Brown & '.4-'lliams-i and from tit2ir c~ -rk eru include~i ii the overall evie- cc, Date. of Ne.t Meetings : 'n- --:7 ~,-~Ln4 h- been rrangel ~,c Th~rsd-- 1, Ds-i,enr - c- are FrLdav, 1-th. 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BaARDIMAJIAGEMENT DT MARCH R-ED-41SATION ,Cnt1SGL:DATE LEkF OPMT10115 ~RIDI APRIL ~T-A APRIL C.1.5 E. P.11TECTIP11 SR/D: ACT;ANTI -TRUST LIG:SLAT101i EXPAJiDIK; -FORT5 -.I jully IMPROVED LEAX PRODUCTIVITY DI QPR PROFITAIi:LITY DOMESTIC SALES sRIDI APRIL 1 .1 LAIIV, 1) Q'R PC~Lk~ el QP. ARAZRUZ ,: D'R 1.L117 UIcL L~ Q,. ' T .0-11 QUAI l T SR'D, jt:Ly BAT Industries document for Province of British Columbia 25 October 1999 T Ir BAT Industries document for Province of British Columbia 25 October 1999 OHM, -E TYPE ---------- ---- -- --------------------------- -- ------- MIEW DUE CHASED REV:~ED BAT--F --- PRODUCT:011 FACIL-Y S~IDI --------------- ---- TSRTIMAY ----------- ---------- DEVELOP21"T READ OFFIcr/R&D RELOCA-1. SRiDI JULY --lA ~ 111 . DI OCTOBER --RESS 1- LAI'Dr ~R QIR NEW LAUNCHES III WEST GERMANY ~R QPR DEVEL-HEUTS 114 E111TE., EUROPE SR QFRIITSRT NEW 1111TIATIVES IN :TALY SR QPR/TSRT S-r HT C) S S -, P-j C;~ ,L,~ C-A, ~4- T" V, 01) QL~,, '--\-\2 a~7 C~) LS) CD KID 7% CL7 (L,01~z (~) 49 C~o V V BAT Industries document for Province of British Columbia 25 October 1999 S ? QD -S t\"F~ k G-0 BAT Industries document for Province of British Columbia 25 October 1999 rDMPANY NAME ISsuE TYPE --------------- ---------- - RE~IEw D~E CHASED --------------- -------------- RVIEWED - ---------- - -------------------- ------------- BROWN L WILLIAMSON .OL SRIDI APRIL STRENGTHEII INTERNATIONAL SRIDI QPR V DIV:SION CDHNON COSTS iPLAIIS) 5R/DI TRADE LOADING REDUCED DI /PRE OCTOBER C, CID 7.1 Ij a-7 c~ I I- ILI -71 4 71 _7 SX-1 7 BAT Industries document for Province of British Columbia 25 October 1999 ~c S, -V E 7% (Z MAI BAT Industries document for Province of British Columbia 25 October 1999 TYPE REVIEW DUE E REVIEWED SUE ------- --- - --- ------------ -- ------ ----------- ----------------------- -DucED COs,:5,'I11CRfA_1M) SR/D1 .ORTS LEAF FXP PR..R.SS KEY COUNTRI" SR QPR I, CREASED UK INCOME 5RIDI KARCH REVIEW U =IIIG SPE'.. SR I" COMPLETEK311ATIC73ATUKE DI 0 11 ELOCAT JONI REORGANISATION PLANS FOR EXPANDING SR/DI SOUTIMPT Oil PRES ENTATIOH EXCLUDING BATIF SR ~RAHD INTEGRITY SR TSRT PROG RE SS NEW KARYLITS SR TSRT IliPROVED PLAIMING SR 'DI G"J9 a--c C+~Es) ?A _~.La 7, 01. a.: 7 IAIW-~ C2 --n (_,A C~~j tj e-e VS 42~ "d A~ BAT Industries document for Province of British Columbia 25 October 1999 ILI ( DS Q 0 1 S- ~LT ~t--AQ ~SAZ,- Cm ~A ~e Qj / P" CiD CD BAT Industries document for Province of British Columbia 25 October 1999 CCINFANY IIkHE :15UE TYPZ RLVIEII MIE CHASED - -- - - - --- - - REVIEWED -- - ------ ------------- ------ ------------------------- I- - - ------ -------------- BATC? PRODUCTIOR FACILITY SR101 TSRT/HAY - ---------- DEVELOPMENT DEVELOPHENTS III EASTMI EUROPE SIR QPR!TSRT IIE14 INITIATIVIts III I-ALY SR QPR/TSRT bATCO PROGRESS IIEW 4PME'S SR TSRT BRAND INTEGRITt 5R TSRT C) C", 0 IJ sat A, iA t C') 's, C ~7 BAT Industries document for Province of British Columbia 25 October 1999 To:-___.~r._?-J. -Ro.baut jobaccij_Strategy Review Team I thought you might like to be reminded of the items you have said you would follow-up on from the Tobacco Strategy Review Team meeting held in -ebruary. The only items in the minutes that may need to be covered are item 14(a) Sidestream Smoke objectives regarding the action you have, or will be tak-ing, to put in hand improvements to your product development and quality control programmes; 14(b) your progress regarding Y-1 tobacco,~and any points on item 3(b) Brand Integrity. ') -- 1~0-i 44,~~' Other points to come out of the February meeting were:- Brazilian Exports You were going to look at strengthening the organisation overseas and the possibility of enlisting BATUKE's help in additional training fo the managers involved. r/ The Chair-an asked for you to report on your approach to the Brazilian Government regarding how increased leaf production can be encouraged and how you intend to increase leaf production by 15%. It may also be worth mentioning how Mr. Lord and Mr. Saboia have fared with regard to Mr. Kohnhorst's manufacturing capacity project. BAT Industries document for Province of British Columbia 26 October 1999 Z-4 z f12 BAT Industries document for Province of British Columbia 25 October 1999 1(1:.__ Ar . _U. -Herter 0 Tobacco Strategy Review Team I thought you might like to be reminded of the items you have said you would follow-up on from the Tobacco Strategy Review Team meeting held in February:- Ire. 6(b) - Market Representation - you were asked to appoint a representative in Bulgaria and Yugoslavia. I/ Item 7(a) - Eastern Europe -/the results of your market study 1 ~ for Czechoslovakia;(the progress regardipg-) "~'T'3~~egotiations in Hungary and Poland.F-~ ~eprogress on the Moscow office and the system for fielding USSR enquiries. Item 9(a) nufacturing Capacity - (and the progress on the expansion of Bayreuth)? - , I ~,, 6 -~ ) Item 11(c) Recruitment - progress on the project.(6~ ,-~ - - I d Item 1? - -- ~, st Quarter and April results review. Item 14(a) - -!~idestream, Smoke Objectives. Item 14(b) I Tobacco Brand Integrity ~irem 21(b)) may also be briefl-, reviewed. You also agreed to prepare reports for the May meeting on the following topics:- New Initiatives in Italy - the potential for Lucky Strike and the possibility of ~ share in Ital. Reconstituted Stem (with Mr. Bramley). N-1-1 Other items you are due to report on are:- - Benson & Hedges in Europe (with Mr. Bramley) - Austria (HB/Lucky Strike expansion and the potential for Lucky 't~,-,,J D61 I Strike in Austria). You are also due to complete a report in July oLi your Head Office relocation plans. Fr- e I ~,X~ . B r am 1 s al to ask for your inp e'- I -ut-r~garding his proJect on In forma C1~8-~s, e.. ~. ?J1 -1 I a-so =derstand that you have decided to circulate a paper on exciseJ efore the November Marketing Seminar. BAT Industries document for Province of British Columbia 25 October 1999 Ile BA X. 1-2 A BAT Industries document for Province of British Columbia 25 October 1999 j9 _: _ _Mr. _R.J . Pritchard CV/) Tobacco Strategy Review Team I thought you might like to be reminded of the items you have said you would tollo-up on from the Tobacco Strategy Review Tea. meeting held in February:- Item 2(b) Marketing Seminar (paras 51-53) Item 3(b) Brand Integrity - Blend Details Pall Mall (TSRT Nov mins) - Discrepancies vs. BATCO. sales figures item 3(c) Sponsorship (Euromins) Item 3(d) PM/RJR TMD Initiative Item 4(a) Progress Plans USIB - Capri, Viceroy, Kool Over-view (para35) - Barclav/Kent tests Spain (due early 91Euromins) - Research Romania (due May) (para 41) Item 4(b) Kent Leisure Package (paras 22-25) Item 4(c) Barclay Strategies - Including Nor-way 9mg Barclay intro) Item 6(a) China (para 49) Item 6(b) Other Markets - LS in France by end March (para 27) item 7(b) Other New Markets Item 9(b) Manufacturing Capacity Study (paras 6,7,8) Item LO Leaf Grade Rationalisation (TSRT mins Nov) Item 12 1st Q I April results Item 13(c) - ETS progress? (para 58) Item 13(d) - Fire Safety progress/news? (para 59) Item 14(a) - Sidestrea. progress? (para 64) Item 14(b) - Y-1 Tobacco progress? (pars 67) Other items but unknown reporting date Thailand progress? (para 45) LS in UK with P-T rep (with UH) (Euromins Reminder to Uh 21.12.90) Austria LS rights (Euromins) Denmark LS launch (Euro.ins) Finland LS lights relaunch + Kent Lights (Euromins) /Ireland Potential for LS or Barclay (Euromins) Single Agent Portugal (Euro.ins) Sweden strengthen/rep Stockhol-/ferry trade (Euro.ins) /Suzer Turkey Rep/Branch office (share BATCO/BW) Duty Free E Europe Taiwan - Progress? (BDB?) (30 f->4 k-yx 011 BAT Industries document for Province of British Columbia 25 October 1999 A E-L ~a LJH LS L- LS L CAIA LA -,L-, -S BAT Industries document for Province of British Columbia 25 October 1999 BAT Industries document for Province of British Columbia 25 October 1999 To:-- Mr. -J-L.-Mercie- Tobacco Strategy Review Team I thought you might like to be reminded of the items from the Tobacco Strategy Re~ie. Team meeting held in February which may involve you:- Item 12 ~Z, st Quarter and April results review. rT7r-em 13(d) - Fire Safety : Mr. Pritchard raised the issue of self-extinguishing cigarettes and I wondered if L this has become an issue in Canada. ,,item 14(a) - Sidestream Smoke Objectives - any action in hand to implement objectives in your product development aid quality control programmes. 7 t2,, 14(b) - Y-1 Tobacco tests - progress so far. ___Bother items coming up for review in the future are the plans f Hardee's and the CT Financial Plan both due for review in April an Hardee's strategy which is due for review in July]. d 30r~ - : e-lose with this note the draft agenda for the May meeting together with a fill set of ~he February papers arid the minutes of che February mee-ing. N.) C) co Urn BAT Industries document for Province of British Columbia 25 October 1999 BAT Industries document for Province of British Columbia 25 October 1999 To:___tr. B.-D. Bra.j~j Tobacco Strategy Review Team Ls~~- I thought you might like to be reminded of the items you have said you would follow-up on fro. the Tobacco Strategy Review Team meeting held in February;- Item 3(a) - lilformation Systems : you are due to report on this. Item 3(b) - Brand Integrity including:- -__-Spain (legal requirement leaf) (para 1IFebmins) - . Belmont/Royal Crown Spain (paral4jebmins) -__--8trengthen Spain LS distribution(paral5,Febmins -..,-Mlaysia/Argentina (para - --Yugoslavia quality (para 17) - _,PGL Worldwide quality (para 17) Item 3(~) -,--5ponsorship (including TMD (?M/Cam41-)? Item 5(a) - UKIB Progress/Plans:- - -Ifaq Goodwill? (para 20) - ,Colombia brand presence? (para 21) -_-T'rance Gallahers after RJP report, sept?(para27 :-~5&H Europe (with UH) para 28 -_--S&H UK due May Item 5(b) "7~romotional Spend (para 37) Item 6(a) - ._-Cl~ina (with RJP) para 49 Item 6(b) - Other Markets:- - ~xico Progress due May (CPC Proposal?) - _.Hungary/Poland (with UH) (para 40) ioz - .S3JTL Clarification due May (para 46) -,,=a/UAE/ Saud i/HK/Barbado s (para 48) - rma (progrssMay?) (para 46) - _-Vietnam (progress May?) (para 46) Item IL(b) -~~ter-Company Transfers progress only (due in Sept) Item L2 st Q + April results Item 13(b) -joking Compendium (by end April) (para 63) Item 13(e) t,-Ndditives (progress due circ. later in year) para65 Item 14(a) --SIdestream progress (para 64) Item 14(b) - .,Y--l Tobacco report (para 67) due May Item 14(c) .Ammonia (was due in May but changed in Feb mins to September (para 69). Item 14(d) - _-Stem (with UH) (para 68) progress? Other items also Po sible:- ogress Leaf Advisory Team (Run, Pol, Bul) by end April (para43) ,,-JTI Monitoring any news (para 50) _-Netherlands B&H due by when? --Organisation France - due by when? _-.Denmark LS launch - .. .. .. --jCloser Skandinavisk Relations due by when? ,,-L'valuate SE55 in UK by when? _',~a~garia investment options,by when? __Hungary pressure on SPA by when? ..,Til'fkey swap LS for JPS _-~!~z~r - rep. BATCO/BW - JV partner? 11 Mall to EE - source from Brazil? by when? '::careen issues - updat -e? BAT Industries document for Province of British Columbia 25 October 1999 c, -"AQN 0o, -,~j ou~ -Q 1 z, W?CJ en