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                  BQLRD QDIPECIOIIS' SU~RY

              ELROPF~N AFFMRS ~bCPflPRTfM; CC~I
             SIEEPIIY Qrrrmn~ ra~man~- N3Vr318FR 19o1


       1.     IIWpraS~

              (xlr ectivity L coneentrated a gelvtniting Jupport in the
              Co~mcil working Gtoup, Corpt end tbo Co~mcil of Minifters
              to eneuto ~t ~ blocking minority remai~u tfa, b Greek
              delegetia k now joined tbe blocking lpinocity in buncil,
              e position ~1~ It ~ 11 NcvePber Cnmcil of Ld~
              Minilters, No substMtiM disnusion took piece in Cnmdl
              a the ~t~~f~ 31rective ee the Lropean atliamcnt bed
              etill to give a opinia, ~eil will n~ ditcustions on
              I ~ ~n the Portuguese Presidency ete expected to give the
              directive e high priority,

              m addition to strengthening the blocking ~ci~ in
              C~il, our ~e~cs in Parlfdenb re to effect e ebanqe in
              the legal bale of the Directivl ftrp k~de 10~ to ~ticle
              235, atlianent it ~ to deliver a opinion in December but
              this tiateble could be deleyed ff we in successful in
              getting the 1~~ bale of ~ Directive referred to
              Parlfrt'l lcgel Mfeirr edttes,

              our ectivities a the ~Iti~inl front have been eslisted B
              the Y'I pnlr oempaign, the 3utopeen Rlblitherr Colnoil'r
              prest eempeign ad fevoureble editoriel covereqe in the leed
              p to the ~trl~ suait,


       .2,    S~SORSII~1

              We beve continued to work olotely witb the Ilg who k
              proved to be e useful point of oolltact tot the activities of
              the Eutopen Perliesrnt's Dtct$r~ a dptt.


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                          ~__~_ -~I~ .-I


           Lre k bcn m nn ~lopentJ d~~ bt Gra ~ira
           Ruqust d ~e~krYp of r~r4rq r~is
           pted~inant~y atidr~ ~re mB
           ~ati~ ~t ~ ~l~a ot ~ea spollsorYp dll ~
           p d~ ~ Grq at n~ ~ ~~ ~11 p~~ re ~ ~
           ~ tlJt ol ar ~iliB b I~ul~ ~ #ddnqs of ~I
           ptalms g~. ~ rb5's 1~1 d~ Inc~rds ~r~ I
           o~ ~ CoPPfnim (n~~~l for ce~i~~a d ~~I)
           centinue ~ kl~,


       1,   ~a~px; ~IREC~IVE

           ~~i$ m ~ p~~d r~~ ~11~ Dlt~~ ~ ~
           ~rl at ~ ~t tr ~nt~,
           ~ndd p~rf$ It ~tlpr ~ ~t ~ dcr~88 of 8h~
           mr ~a~, h~$ e~~~d dtl~y O ~ 1\ uming
           ~Q #I b e~r ~ ~~ ~~wl ~na e~ ~eeo
           pckagccr ~ r~rcPcnt bt · ~~~ rming ~ Msal
           ~f; r ·~im df 1 ~ l~d fOt ~1Pmta~ ot ~
           pr~t~t d n~~l ~ u~~o oi Frurxl 1 rontaining
                      agits 1 rl~ ~tdina~ caqai~
           d~ ar Bm eolll~~ w Bfld ~ ~t dfici~
           support ita ~ ~rrpen~ ~8udinq ~ ~I d Lt3


           1 c~Pn p~i~a r r~~~ 8 ~ co~nc~ ol ~~
           ~~tlr~ m 11 Novmber ~ ~a P~ective is ~~ ~
           ~~ ~ ~abtir for l~llia t~tlb B t
              ~inal adeptia ai ~ Pfrle~~ ii ~ ~ ~s ~~a
           ~r ~ PettugueJI Ptrlihg on I ~,


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         Note on conversation vithPaul Bineham, 3,1,91


          MARKETWG OECIGARETIFS INMUl~sTt~lES wmr TOTAL AD B~S


         PB made these cbmmcna in respanre to a request Eromlohn Ticehurst, for
         use in mt interview with a trade magadne, 'Ibey could bowever he of use
         .ar a general response to the question: 'How do you sell cigarettes in a
         country where no adverbjing is pcrmittedl',

         The markc~hg of all ~eg products hm four basic elements · Product,
         Place, Rice and Promob:on Ilyou remove any one of these, the other
         three become more si~ificant So in a market where no Promotion of
         cigarettes is allowed, you could expect to see the following:

         Product ·   iaao~a~on becomes the key, A truly 'new' cignttewhicb
                     offers the consumer something different leg Batday) on
                     still be introduced rueeessf~Uy in 1 marketwhcre promotion
                     is banned · as Barclaylav war in Finland ~o wpcn 10 sec
                     di~erent pack sites and shapes · with no advertising
                     allowed the pack itself must create and mammm brand
                     image,

         Place ·     more tf~dcnt we of the trade, and in·store rommunica~oq
                     ie permanent merchandising material and point of sale
                     temporary material leg stickers), 'I~e aim is to create a
                     better impact · to let the retail environment communicate
                     the values of the product more effectively, More ef~dcnt
                     use of the company's sales force.

         Price ·     In some countries leg France) prices are fixed by law, In
                     all countries with ad bansh4wole', you mn expeato see
                     more price competition cormng m · more low·price brands
                     entering the market in the longer term,

         Finally, note that although advertising was restricted in Finlaad since
         1969 and banned since 1928, there is as yet no indication that the brand
         images of the major international brands have weakened · something we
         might have expected to see,

         Sales in Finland have been stable for the last fiveyears and smoking
         incidence is on the increase · up by over 3% in Be part four years to
         28,1%, This is fat higher than say, Holland (12,8%) where much fewer
         restrictions are in place, If the Fianish ban is worlring, why is smoking
         inddence rising after 12 years of no advertising?


         Gaye Pedlow


                            r. .
         AcelAnv I

         41h January 1991                   'u I
                            ~f" r;i~ no~i(ho~~
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