Restricted
VISIT TO Hus LOUISVILLE
23-25 January 1984
Present: Dr I W Hughes
Mr T Sandefur
Mr E Kohnhorst
Or R A Sanford
Mr R J Pritchard
Dr L C F SI&-&kman
The meeting was arranged as the first of a series with CAC
,-,--Ompanies to .ensure @hst there was maximum integration and
,a in overlap of the R&D carried out in Operating Companies
and GR&DC.
.!,*The discussions ranged over a number of subjects-- from local
B&W to general BAT Group priorities.
B&W DOMESTIC
B&W's plan for the recovery of market share is almost entirely
dependent on the successful development and marketing of
technically innovative new produts - one by the end of 2984
.-and another by 1986.
Line extensions, or modification of existing products, are
thought unlikely to lead to a significant increase in sales
notwithstanding the recent success of Lori I I a rd Is NEWPORT.
---which is a conventional product.
iture US launch costs will be minimised by starting with a
-IN,' mini -market' test. prior to going to a full test market.
Successful product will then be tried in a limited area (say,
25% of the US) before expanding nationally. Such a process
will normally take about 2 years.
ACCEPTABILITY OF NEW PRODUCTS
There is a need to be able to quantify the organoleptic
differences (taste, flavour, sensation) between modern cigarettes
(at say , 15, 10 and 5 mg tar) and past products. The O/WP
technique was said to be insensitive at this tar level; the
recent GR&DC work on PT I and Sandra Scans should, therefore,
be pursued urgently.
Oki
BAT Co LTD MINNESOTA TOBACCO LITIGATION

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MARLBORO AND MERIT
Despite early signs that Merit contained unique flavour
Components, especially pyrazine, there is still uncertainty as
to whether its success is wholly image/marketing or whether It
has, as claimed by PM, a truly innovative technical basis.
The past GR&DC work on Projects BROLAM and TIMER was mentioned
and aroused interest. It was agreed that samples should be
sent to SAW, if still available, despite the fact that the
current SAW primary conditions are not able to reproduce the
process conditions used by GR&DC: (and thought to be used by
PM).
HARSHNESS AND -IRRITATION
Existing B&W products ten-d to stand-out against competition In
terms of harshness and irritation. Louisville R&D is currently
looking at ways of changing the blends - with emphasis an
comparing the effects of tip ventilation and-filtration for a
given tar level.
We were asked to look again at all relevant past work, eg the
use of citric acid esters on filters to lower the pH of smoke.
Also, to consider whether formaldehyde levels -are relevant.
(Formaldehyde might have' an anesthetic effect of numbing the
senses and hence reduce the impression of harshness and
irritation.)
Mention was also made of the past work of Dorothy Franks who
reported in 1975 that additions of polypropylene oxide generally
amelioriated smoke harshness.
COHORT ANALYSIS
The reason for B&W not wishing Dr Thornton to pursue cohort
analysis in the US was explained. (Basically. the -c oDQept kas
already been used in defence of the industry - albeit based
only on limited areas of the country. All relAvant US papers
have been sent to Dr Thornton for information.)
BIOLOGICAL ACTIVITY
Although pregnancy, he'art disease. emphysema etc are areas of
current concern, it was agreed that lung cancer-still dominates.
The broad objectives of Project RIO were discussed. It was
suggested that we should attempt to got advice from medical
authorities and Europe as to what tests would be accepted by
the medical profession as evidence of reduced biological co
activity.
BAT Co LTD - MINNESOTA TOBACCO LITIGATION

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ir Hughes said there was no difficulty in getting advice from
leading US authorities. Current European consultants, eg
Professors Sma and Schilfelbein of Germany were discounted,
as were those consulted by GROC. (But it should be hated that
whereas it is common in the US for eminent me specialists
to run large research establishments and to act as consultants
to industry, it is not the custom in the UK.)
NEW OPEN-DOOR POLICY/PATENTS
While accepting the Rio SCAC decision to create an open-door
policy throughout BAT, Dr Hughes asked what Incentive would
there be for an operating company to file and pay for overseas
patents on a -new development if local overseas companies would
then automatically get royalty-free use of the inventions.
We explained the recent thinking whereby BATCo may a
Operating Companies that they should finance, in local currency,
Thi s woul d
all 'BAT' patents that are filed in their country.
apply both to GR&DC inventions and to those arising from S&W,
Germany etc.
Dr Sanford was asked, and agreed, to give us an estimate for
1984 of the breakdown of the S&W expen'di on ACTRON patents
in the various countries worldwide. No attempt will be taken
by BSW to adopt the proposed new procedure until the subject
has been re-raised at the DNS on 8 February.
Pending such a decision, It was suggested that, although it
may be thought that the financial burden on Operating Companies
would be unfair (in that they might not have the right to exploit
another company's patent if it was of strategic importance to
that company) arrangements could probably be made whereby the
local patenting costs incurred could be offset against 'any
future royalty payments that might arise in respect of any
subsequent licences that were based an the prime patents.
On the general subject of innovation, it was clear that
SAW continues to be sensitive to the belief that, since they
produce more product and process developments than any-other
company, the open-door policy Is primarily one way! I I Canada
is of particular concern because of BAT's I iml Led share holding.
FILTERS
Dr Hughes cri tic the decision of the 1983 Research Conference
to reduce GR&DC work cA selective filtration. He believes that
filters remains the vital area for' the future. After discussion,
we agreed to re-assess all past GR&DC work on filtration. (B&W
are themselves actively re-looking at Duol I te and PEI Alumina C=)
filters.) 1_-0
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BAT Co LTD MINNESOTATOBACCOLITIGATION

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SIDESTREAM
US competitors are thought to be extremely active in the
development of reduced sidestream products, and B&W must be in
a posi ti on to I a unch a product - this, year, if -necess a ry.
Samples of our best paper and/or products should be sent to
SAW urgently.
R&D CONFERENCESITECHNICAL MEETINGS
Dr Hughes questioned the number of technical meetings that
h ave be en hel d i n t he pa st a nd a re pr opos ed f a r the f utu re .
After strong represLs'fitation that such meeti ngs are a most
effective way of ensuring that GR&DC work is, (a) on the right
lines, and (b I is communicated rapidly, he withdrew the comment.
We agreed. however, to re-look at the Smoking Behaviour Conference
scheduled to be hel in Canada-in July - on the basis:-
1. Could R&D and Marketing combine effectively
at the specialist (middle manager) level?
2. Did the proposed Agenda go beyond the
purpose of the meeting?
It was agreed that in the meanwhile, SAW would give their
comments direct to Dr Dunn
SMOKING AND HEALTH
Separate Meeting with Mr Pepples and Dr Blackman
The current legal cases in New Jersey were explained. Alt hough
they called for extreme care in what was said or implied in our
writings and talking we must continue to stres's the controversy,
--@nd cite anomalies. To remain silent would not be in the
interests of the industry.
The proposal to have printed - at the very least for circulation
at Chelwood Courses - the LCFB talk on smoking and health was
strongly supported. The format would be a series of brief aide-
memoires plus supporting graphs, quotes etc.
Mr Pepples said he would like to see a copy immediately it is
cleared by Anne Johnson.
R 0 PRITCHARD I L C F BLACKMAN co
6 February 1984
CC Mr A L Heard Dr R Binns
Dr M J Hardwick Or C I Ayres co
BAT Co LTD - MINNESOTA TOBACCO LITIGATION