lesaarch Policy Group Setting Ath - Stb September 1996 Present: A.L. leard, E. 91nan, P.M. Deutca, ?.J. Dunn Z. Esush, R.I. Kohahorst, Z. Rittershaus, C.?. Siquetra I.I. Thornton C*-ordination of R&D The opportunity was taken to review changes agreed last year in the organiaistion and strategies for Group I&D and to &sees@ the 11 ztent to whitb they bad been successfully Implemented. We now have agreed common objectives, a database of Croup projects, 11 uccessful Introduction of collaborative projects and a such higher degree of integration of the Individual R&D Centres. We still have to resolve the issue of sponsorship of some projects at Southampton and In formal reporting, particularly by USA. Concern had been expressed. at the time that Aecentralisation of Group R&D was introduced, over the willingness of CAC's to support longer tern fundamental research to Improve products, If faced - with adverse trading circumstances. This fear Is b*ginuiug to 'be realised as we are seeing calls for short term economies in the larger R&D contras despito the fa.ct that there has been practically no growth in the CAC R&D Centre& folLoviug the reduction at Southauptoo. The lack of co-ordination of Group activities on additives guidance Is causing problems, for Instance, In the dialogue between different companies and our principal suppliers. A need for discussion betweou experts from UK, USA. and West Germany was agreed and this can probably be achieved when SIG seats La UX. T.G. Kitchell Is to convene this meeting which w1.1l involve Xrs- The* (BATCY) and Dr. J.G. Esterla (I&V). Co-ordLustion an patents la dimities Is working well, and the important topic of Smoking Health coordination La nov such Improved following the establishment of the SRG. Reporting There Is a need for adequate reporting of progress and of completed projects. It was agreed that project areas will be reported half yearly by each laboratory and this will Us entered a the computer database. If further details of work-in-progress :r* required those can be provided on request. Additionally 11 tatus reviews an business objectives will be produced annually, these being of particular value to senior management. ALE will use the project reviews to determine whether any of the work in progress has reached a stage when a definitive report ahould be produced. Such an example is the ammonia research which has been shared extensively at the Group Product Development Conference and other foruss and Z&V agrees to report their retail work. Technology Transfer to NATCo companies Delegates agreed that they would provide to the Research Co-ordinator information an product developments as opposed to bra:ud developments, indeed most 'bad already supplied such for building the Group I&D Programme. Thor* was considerable resistance to w1der dissemination of tbkL& sensitive Information. Concern was expressed that this would make security of Ideas difficult to Suarantee. Thorn also lay the danger of a small cospany launching a new product ahead of the company S*nerstlug the Original Idea. ALE was asked to try to detorulue sp&c1fIc ZATCc company interests and then to establish a direct link to the appropriate C&C company. BAT Co LTD - MINNESOTA TOBACCO LITIGATION 2 Whilat this was eaphanisod for Product Development concepts, it was felt to be generally true for all technology flow between the CAC R&D Centres and SATCo companies. All centres agreed to send to-ALE examples where CACs are currently assisting IATCo companies, using their research expertise. Programme Format Although each laboratory may present its work programme in a different way for local purposes, It was agreed that a version of each laboratory's programmes could be produced from a central data base using a standard format. UK, Souza Cruz and Wills will operate ezelusively on this format. It is clear that this documentation has two purposes: detailed information for research scientists and broad information for management. Some means of condensing project listings might be helpful for the latter purpose and will be explored. Croup Information System Considerable progress has been made In establishing the database during the past year and system is proving useful. -Further development involving a meeting of Information specialists will take place either late L986 or early 1987, it being advantageous to hold the seating 'before attempting to put together next year's programme. Allocation of R&D effort Now that we have Group information on projects and related effort, it is possible to consider priorities. Currently, almost half of all Group-related activities is concerned with subjective smoke quality and much less effort Is devoted to the other rea*arch objectives. This probably correctly reflects the current needs of the Croup. Although, for instance, effort on cost reduction currently is only 82, 3 years &So this was a major priority for US and Germany. They are now benefitting from that work. Wbilat the need for short term market successes was understood, In -n was expressed that we have insufficient 'seed general, coucer corn' research in the product area and thl a must be discussed both locally and centrally with senior managers. The social acceptabllity/emoker behaviour issue was highlighted by ZATCF as being highly important for the future. These topics were considered to be an *xr_*u*iou of the overall smoking and health Issue rather than a separate topic and our I&D effort needs to be Increased. VbL la for Instance, sidestream reductions represent one approach and this La being actively pursued in RATUKE, there exists a wider range of technical Issues to 'be taken Into account Including beneficial aspect* of smoking. BATCY are developing some of the thinking in this area. Focussing *Q social concerns the S&C is the foram for Identifying key areas for research and development and for recommending an appropriate research programme and this will form the subject of a meeting of the SIC is the near future. Its findings will be considered by the &*search Policy Croup for development of & suitable programme, including the co Jbi. setting of clear objectives using existing in-house resources sud if necessary external expertise BAT Co LTD - MINNELOTA TOBACCO LITIGATION 3 Product Liability The topic was briefly reviewed with consideration of the planned Introduction of product liability legislation In Europe and the position in the USA. Current opinion indicates a clear duty to be aware of relevant scientific literature on snake and health Issues, and, if necessary, to carry out appropriate research on the product and/or its effects on the sacker. The sac will recommend to the RPC whether or not research (internal or external) is required on specific topics. Scientific Research Group The first meeting of the group took place in Nice In April 1986 and the draft Teruo of Reference end working practices were con The Terns of Reference are:- 1. From a scientific view point smoking Issues are defined as the effects of smoking, if any, on the smoker and non-smoker particularly claims as to the association between smoking, and individual sucke components, with specific diseases and/or normal health. 2. Tb* SRG will identify all available research (both internal and external) relevant to smoking issues. 3. The SRG will evaluate the results, quality and Implications of such work. 4. The SRG will identify and recommend any additional research required, Including, wherever possible, the identification of research centres where such work could be carried out. In order to monitor the literature effectively, it has been agreed that a Senior Scientific Adviser be recruited by BATCo. This recruitment is currently in bond. The adviser will *can relevant literature building from existing group abstracting resources. The SRC will become involved In sponsorship of any external studies u*c*sssry to supplement Lb* substantial amount of work currently under way. This meeting proposed a budget of E200,000 for the first year and all Group members agreed that this should be funded by then. In the future, a higher level of financial support say ha needed. Meub*rship of the group as agreed in Nice was confirmed, i.e.: Dr. R. E. Thornton BATCo London Dr. S.R. Massey Imperial Tobacco. Montreal Dr. F. Knabjohann BATCY, Hamburg Dr. F. Seeboffer ZATCF, Hamburg Dr. C. Smith DATUM, Southampton Dr. i.e. Est*rl& Saw, Louisville It vas stressed that when necessary, consultants should be used to provide expect advice. The next meeting of the SRC will take place in the UT. in January 1987 and will discuss 'Other Noxa'. 13ATCo LTD - MINNESOTATOBACCOLITIGATION 4 Future Research Conference This will take place in early October in the following locations:- 1987 - USA 1988 - Germany 1989 - C&Dad* The format of the current meeting will be retained with technical presentation* followed by a separate two-day meeting of the RPG during which it in expected that there will be a greater need in future to respond to the recommendations and the information coming from the research programmes of the SRG. Whilat the XPG meeting is held, the uom-RPG members will cover technical Issues and au appropriate agenda will be produced by the Research Manager of the host country. Future Funding of R&D ALE presented three scenarios to be considered as a basis for Group funding:- 1. -Pool and Share' - total Group-relevant project costs would be shared out an a turnover basis. This was not recommended since it would generate accounting costs and endless debate over both Z Group effort in each centre and 'quality' of ruruover. 2. -Costs lie where cbey fall- On the grounds that In general, although each cestro does Group-relevant work, practically none Is done for Group reasons or benefit (it meets the need of the parent company). This would favour no cross-charging. 3. -Costs lie where they fall with the exception of those ttributable to Group Strategic mark in UX and Brazi.1'. :his scenario recognises that there in work at Southampton (L2m) and Brazil (LO. 5 5u) that is Group Strategic but not spacifically strategic to SATUKZ/BATCo. The proposal to that the Brazil work continue to be paid by Souza Cruz but the t2w Southampton shortfall should be equally divided between remaining CACs plus NATCo, preferably on an equal shares basis In order to move towards similar total R&D expenditure against turnover. The XPG members were asked to comment on three issues: 1. Did they agree that this particular teas of scientists doing Group Strategic Fundamental research should be retained? N-0 cx:@ BAT Co LTD MINNELOTA TOBACCO LITIGATION 5 2. Were they satisfied with all aspects of their current programme? 3. Would they be prepared to finance the team accepting that this must be for a minimum tint period of 3 years? There was a consensus view that we need to retain this team and that, in due course, other centres may build up a similar resource. The projects have been subjected to a critical analysis and refocussing during the past year by CAC representatives, and this will be a continuing exercise. A review team of CAC representation will monitor/steer this work each June. Delegates would be prepared to recommend funding provided this did not result in curtailment of their current plans and resources. (Funding on au equal shares basis was accepted by most delegates, but Australia found it unacceptable.) Early Warning y1stem Last year BATCF proposed to host a Competitive Intelligence Meeting and subsequently canvassed Group views. In view of mixed reactions and uncertainties over relationships to non-R&D functions for example, the meeting was deferred subject to reconsideration by this conference. It was concluded that ve should benefit from a more systematic evaluation of external factors such as competitor activity, economic trends, international regulatory trends, etc. in so far as they impact on R&D policy and a meeting was agreed with specialist members from. each country in Spring 1987 to consider introducing 'Early Warning Systems' of which competitor intelligence would be simply one input. Technical Specialist Meetings It was agreed that the following meetings will be held in the next year: Analytical Research - Louisville Flavour Workshop - Canada Product Development - Germany (to Include Filters and Sidestream) Early warning systems - Germany (If possible, arrange back-to-back with Information Group meeting) C=) Southampton Research Roviev - UK %-0 co (to include Smoke Control) -J BAT Co LTD - I TOBACCO LITIGATION