CHAIRMAN'S CONFER ENCE HOT SPRI NGS
PAYING FOR RESEARCH
1. This paper is offered as a basi r discussion.
it is
realised that the levy may nq)~ ~.. Iappropriite
n-!echanism
for operating 2 research M
,~p6e* ent in all cases.
2. In the past the research carried out by '_
Er-A.T. H.Q. has
been paid for by B.A.T. in the U. IC-. The cost
Nis been
partly offset by contributions from Associated
Companic-s
as part of advisory fees, or in*t)ie case of B. &.
W. ond-r-
a "Cost and Risk Sharing Agreement". In the
em-rent
this latter Agreement has meknt ihat D. & W.
buting less than Malaya, Swit7erland ur Holland
f,,r
3. It is now proposed that all R. & D. flaiie by
operat4z:~
companies should properly be regarded as done fc,i
the
Compnny and paid for by the concernec'. I'lic t
product froin sucli R. & D. thcrefore would th-L-
property of the operating company for exploita-1,
n ain -,, h~ I
4. Mvrnber companies however would agree certain
ground
rules for the exploitation of such research
product atid f,-,r
the exchange of information and avoidance of
unx-:anted
duplication. (See Appendix 1).
5. The R. & D. directed from the Centre calls for
special
consideration, 01 ,be to1n1 budget of nbout E4
n,;.M, "1 11 "T' 1,
E2. 5 million c..n be identified as research in
sopi ... it of
general Group strategy (see Appendix 11) ~xhile
titic ron--irld,
can be regarded as self-financing or as the
i-vsp,ri~ibility
of the Centre.
6. It is suggested that the identified Central
Grotip research
should be financed by a levy on sales by
Con,pjn;(-5z. rlj;s
levy would amount to 0. 1 50/'p Net Turnover.
7. It is believed th;s method could have
advantages bocansc it
v.,ould have acceptance by Authorities to
tr(tating this
as a deduction for tax in the paying country,
thcre woilld be
more chpnce of obtaining Exchnnue Control opproval
to
and adjustment for innation woul d be atitoniatic.
8. It i%, cz,--se,,tial to get prop-.r fin;,ncing
of our Ioj, !i i
rese,.rch. It may be that some stri-AU)-;1I
LIEW110
BATCo document for Province of BritiSh Columbia 10
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the creation of a Group research conipany).rnight
be useful
in order to facilitate further the involvement of
the major
companies if this were desired. However it is
hoped to get
agreement in principle now with the major
companies and
commitment both to the aims of central research
and the
contributions involved (See Appendix III).
SJG /FA
18. 5.76.
cc
cc
BATCo document for Province of British Columbia 10
November 1999


APP.EJ: D I X
1. Marketing and consumer research, manufact-uring
improvements and product. development techniques
and
methodology should be exchanged freely. Although
the bigger facilities in the operating companies
might
be expected to make bigger inputs the size of
Lhe--;e
facilities is in proportion to company sales,
weighted
for market sophistication, and all companies will
therefore benefit appropriately.
in products. Succe;sful IMOZ-s are the desir--~d
c-ilc-,--
and compensation will-.accrue to the producer in
such bm_~ds to users.
P-4--c
3. Product and process developments which are
patent:-. 1~-
should be protected by the inventors and such
-;rlv
become licensable to users ihside and outside the
4. There should be a general agreement between al
I T,
companies in the Division to qive first
cpt.Jori_-.
times and "most favoured nation" treatintant tc
companies in the Division with respect tc! prori
-e_-_
process patents. It would also be agrc,~-d Thai
licences will not be granted to competitcrs.
5. Machinery developn-ints which are patent-:2~,le
rr-,-,, 1:,
licensed exclusively to appropriate macli4riery
7-,-
but the interests of the Divj sion would I ~:-
orc. ~--c
in order to give all rrember companies P.--c
rer#:-I:~ _;:i
'no less favourablel terms.
6. For all'patents the inventing company would
in such countries as it sees fit but in-Ffll ca:CT
Divisional H.Q. should be consulted and ruita~-]e
arrangements made to assign or protect in such
oU-7-
countries as may be required.
7. In order, to eliminate unnecessary dupl j c.-
1, j ort
make R&D as effective as possible the coriranir -:
.j* 1
agree to keep each other informed on !-
exchange methodology and to pool results stjbj(.Ct
!.C
patent protection mentioned above.
ps;-ful, will be
2. Product Developments if sqcc-
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APPEi:DIX 11
The Research & Development Department F3,.jdci,.,t
is
attached. In this Tobacco Research Council costs
of k156,000
are included under Biological Research'and
Information. if
these are deducted the total Group research
offered for
recovery is Z2,444,000 under the five headings:
(1) Biological Research and Information
(2) Product Research
(3) Smoker Research
(4) Process and Engineering Research
(5) New Smoking Material Research
Description of the aims and scope of the work
involved.
The aims have all been reviewed and agreed --t
Montreal in 1976.
(1) Biolooical Research and Information
Aim: To put the Group in a position to un-errtars
the relevance and imoortahce of advancer m-22e
=-.n,.--
where in this field and to
the biological activity of tobacco smoke from
dif,'
product.,s can be compared using tests wtich may
bi
to diseases or benefits attributed to in
to guide general product development,
investrr.~r_-nt c r, i1
development of specific products.
This has necessitated setting up bio1o,:i1c,1
facilities using small animals as well as oLh,~,r
Le-L
procedures. The in-house animal work to datc
concentrated successfully on producing measur-d
do!r-s
smoke which are inhaled by animals and reach'the
targc.1.
oroans in sufficient quantity. As a consequ,ricc,
ter'
pr8cedures are available which may be related to
diseases. It is believed that BAT are now a-. far
ad-,
in some techniques as any others and we have
:-;uffic~er; ' b cf
knowledge to engage in dialogue on an equal
f~,rj',Jric wi'll
Government agencies. While the main thrust is
prC-:t.)C-.
orientated, it is intended to continue resEarch
worl,~ j,.~-
the effect of smoke on animals and biological
syst,-ris ir
properly to assess the value of the work of othcrs
and ti,
further our own procedures.
External contract %..,ork covers both medium -id
term mouse skin painting and is designed to
guide-_ the
upon which product-design should be founded. The
stu,';-cs
the various forms of reconstituted tobacco and
tobacco substiLut,-:
and are also intended to counter any suggestion
that n*,-oLit-.
could be related to carcinogc--nicity.
The examination of the possible h,alth
con-q~i,:,-7-s
arising from the use of additives on tobacco
p1coducts -; al!'o
an important activity and certain additives are
subject, Lo (Z:)
detailed study. I'D
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- 2 - AJ~J'~Ll! ~ ~ v: .1 !-
The whole programme, while direcLed by 11.1'.
is gre-ktly assisLed by the input of the various
Compiny R F. 1)
I.aboratories through the Biological Research
MeeLing %-.-hich is
particularly concerned with priorities. Work done
for
specific company product developments or for
!specific
company problems has,-in the past, been charged
dir---tly,
where this was possible. '
There is continuing support for the wor). of TRC,
which Is being directed towards the examination of
c:--rdio-
vascular disease.
Finally, an important aspect of the whol-
is the provision of a sound information service.
(2) Product Research
Aim: The advancement of technical kno,.,!l c- dg2
n
to combine the cornpQnents of cigarettes to
T)rc.-'
predictable effects.
To this end, it is necessary to undcj-st- t,,--
ways whicli are available for controlling t~:-?
comoosition and filtration of smcke in any
It is also necessary to establish the d esir-d rt
which these controlling influences should rnove.
VJ:
therefore, in hand with the objective of
explaining the effects of tobacco blend cioarett'?
C
filters, individually, and in combination, ~-n Lfe
d
physics and chemistry of smoke. As-,;ociaLr-:,'
-1,"th ti
the use of sophisticated techniques for
id~rviif~,;iiq
quantifying tobacco and smoke constituent!..
It is necessary to find out what effectF
important in consumer terms. One method of
approi--' r---
for example has been to examine in great di-Lail
th~.- ::-
on a particular market and identify patterns
,,hich u-1,
describe competitors, products. The
develf:~p:::erit ai
ment of sensory assessment techniques is
fundzari~,rtizj ir
approaches in this area, including passive
sinaking.
There is also an increasing pr;---surc [jc-!
authorities to measure and report the deliv-~ry of
9
numbers of smoke constituents, either on th!-~
p,1c!:et ':)c it,
league tables. Means of dealing with this and ant-
'I.- ~ r, -~ 1 ; ng
future developments are necessary- The influance
of m3c-:o-
biological control, factory hygiene and pesticid-s
c,,
cigarettes and the study of nicotine and the
sL-arr-h E,-,r
alternatives are projects arising wholly or in
part frc).T
this area.
known. The concept of total product design is
c0
c0
BATCo document for Province of BritiSh Columbia 10
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-3
3. Smoker Research
Aim: To establish, in objective terms, why pr-ople
smoke, how they smoke and the effect of product
characteristics on smoker response, in order that
preferred cigarettes may be designed.
In order for any effective studies to be carri.,~d
out on smokers, it has first been necessary to
ensure the
free and willing co-operation of a large number of
p:,ople,
who are prepared to act as experimental subjects.
A large
proportion of the staff at G.R & D.C. are taking
part-- in
the experimental programme.
It has been necessary to develop reli~~blr-
objective ways of observing and mpasuring how
peorle
and to couple with this the construction of
equir~:-mn': for
reproducing smoking patterns. This has opcned the
c~'.-Dr
to finding out the ways in which different smokers
a
given cigarette and the factors which influence
this
i.e. personality, sex, motivation, etc. It has
~Isc,
way to determining the manner in which smokers
rpodif,,-
habits when changing from one pr~-~jct to
construction and to thei-r compensatory
L-eaCt'10116.
The rewards of smoking which are soucht 1--,.
range from the purely psychological to a variety
C17 1-1~~'~-":_
logical effects, some of which may be rela-:e~ to
The use of electro-enceph;alography to study the
e-
smol,ing on brain activity (particularly alpha
leading to the better understanding of the
might point to their influence on preferencc.
4. Process and Encineerino Research
Aim: To pursue longer range developmerts in LC--1
and filter processing and candling tecl-r.iqu-,
to establish both'methods and guidelines
quality of the product can be improved,
more efficiently, greater control exercis-d U.
packaged product and cost reductions real-isecl-
The work on process and engineering i,.-hich i F;
done for the whole Group rather than any
particular
has in the past been both of a long and short term
ni~!-urc.
On the primary processing side, there is a
continuing
for knoaledge, understanding and assistance with
the Jinple-
mentation of methods for expanding tobacco. Recont
prod-2ct
developments have pointed to possible advantages
of U-se
materials in low delivery cigarettes, as opposed
to the
simple use in cost saving, for example.
The developing need for specifying
deliveries, particularly the labelling of
nackaqcf, h-n
meant that work on controlling these properties
L111OU 01 thr-
leaf plant and primary process is of incrr--;~sing
import,-!,ico.
New equipment dc~sign has also boen called for. co
BATCo document for Province of British Columbia 10
November 1999


4
To improve product quality it is nece~-!-,atv to
understand the interaction of machinery with the
prod,ict,
particularly secondary machinery. Techniqucs are
britig
established for the assessment of machine
p~-rform;ijic'~- -!tid
operation. Current machine performance
chiirAcLc-risti-s
are being examined and the effect of fault
dc-tection !-id
anticipation on machine efficiencies is being
determi:, d.
The development of new filters and an examitiation
of !he
control and understanding of filter hardness are
also
current examples of work under this head.
5- New Smokina Mat-rials Research
Aim: To develop the options and the
t(---_-hno1;'.')y
the production of smoking irat-r-'als
subjective ?;rnoking characteristics and physic.-I
properties compatible with tobacco manu'acture,
while possessing improved andlor controlled
properties with optimisation of cost.
With this aim, both tobacco and
smoking materials are undc-r development in
PRT and BATFLAKE ref:p-sctively - with tl,e o" f71
to hybrid formulations of PRT and PCL.
in the PRT-71 procrari-imc-, the
studied of a small plant which itself would
rrovi-I E
%..,ay in for any company, big or smal 1, to
tobacco and hybrids for ths reduction of
The examination is being mace of whole plant rc
cultivation, harvesting and curing specific---,!
1y
The use of additives - which could lead to h,hrid
- to control smoke deliveries and, in partic,
Yl;:~r,
CO, are under investigation. The effects-of
proc,_-
are also being studied.
With the trend to low delivery
probable need to enhance nicotine transfer at.j
t~_-
positive flavour attributes to the smoke, is
al.~~o
Although it is seen th&t efforL
on achieving the objectives by tobacco
recorirtitulion.
development of BATFLAKE - a rion-tobacco smo~-.;na
matc-rl :i
continuing. If BATFLAKE is to be acceptable to the
at significant levels in cigarette blends,
properties is required and efforts are bena
co,-ic-.r0.j- ~.-T
this aspect. All the biological testing of new
materials is covered in the Biological Research
progr',
In order to appraise the Group of external
developments, the eval uation of compet i tors i
~:-cons t. -; t -:
tobaccos and non-tobacco smak i ng mater-i als wi
I I cot) L i:.
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BATCo document for Province of BritiSh Columbia 10
November 1999