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TOAACCO STIAMGY RUM TZAM
The purpose of this note is to provide background on the terms of reference
and issues for the Tobacco Strategy Uview team meeting -rranged for
31st October 1988.
Terms of Reference
1. When the team was set up in December L984 it van agreed that its
principal aims should be to ensure that the Group mounts a coherent
strategic thrust in Tobacco, that there is effective technical and
marketing co-operation between the Group's Tobacco businesses and that
there is a unified approach on Smoking Issues.
2. It was noted that the team would be concerned with major now
initiatives and with removing structural and other obstacles to
effective marketing or technical co-operation.
It was not intended that the team should be concerned with monitoring
progress in areas where co-operation is already proceeding
satisfactorily or with issues which are specific to only ane: Operating
Group. However it may be used as a means for sharing information in
cases where this appears to be appropriate (e.g. where a particular
development in one company could be of wider interest).
Issues
Issues which have previously been covered by the team or which have been
**cod for consideration are outlined below. In each case, the current
Bugg*$ of the issue is reviewed and reports due to be presented to the
meeting on 31st October are noted.
1. Policy/Action on Smoking Issues, BATCa. are responsible for the
production and dissemination of the Smoking Issues Compandiua and for
organising semimars to discuss the issues. Following an internal
seminar on Passive Smoking, a public seminar on low risk epidemiology
has been arranged for Hatch 1989. 'it. Bramley is due to report
progress.
2. 1 & D: In the past. the team has reviewed the centrally
controlled element of the Group R & D programme and has commented
on:-
(a) Priorities.
(b) Levels of expenditure.
(c) The allocation to individual operations of the work and of the
charges for this activity.
Mr. Heard. who is responsible for co-ordinating the R & 0 programs
will be invited to present his proposed programme for 1,959. At the
same time, he will also report progress on projects Airbus and
Grte rid ot - Mr. Pritchard will be asked to provide information on the
reception in the market to the launch of the RJR smokeless cigarette.
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3. Process Development
(a) The team has monitored the development of the kPZX expanded
tobacco process and Mr. Bradley Ulu provide a report an the
current situation.
(b) It was noted that the DIET plant located in Berlin would be sold
after the patent expires in September 1988. Mr. Zraulay will
report an the current situation.
4. Leaf Buying
The team has noted the benefits of centralised leaf buying and the
current &La La to have BATCF fully integrated in this system. by and
1989. Mr. Bramlay will report progress.
5. The DeveloEment and Marketing of Nov Products
The team has initiated action to accelerate the dissemination of
Barclay and Capri into a wide range of markets. Mr. 8ruall is due to
report on this and will also report, with Mr. Pritchard, an the
possibility of licancing these products to the Spanish monopoly and to
Gallahers.
6. Implications of Europe 1992
The team has noted action being taken by B.ATCo. and BATCF in relation
to the EEC iaitiative to create a Single European Market by 1992:-
(a) Preparing proposals to the Commission on Tax flarmonisation and
trying to preserve, for as long as possible, the Duty-free
trade.
(b) Preparing proposals for marketing and manufacturing
rat ton alis a
Mr. Bruell and Mr. Branley are due to report an these issues.
7. Exports
It has been suggested that the team should review the current
situation with regard to exports and should consider whether some
general guidelines should be established for deciding where and to
what extent export opportunities should be pursued.
A background paper on this subject will be circulated before the
matting and there will also be a separate paper from Souza Cruz
regarding the potential for exports from Brazil.
S. Other Strategic Options/Issu*s
Other issues which have been considered previously by the team but
which are not due to be discussed at the matting are an follows-
(a) The potential. priorities and responsibility for new initiatives
to become established or to improve market shares In markets
where there is an ideutif ied opportunity to do so (e.g. Japan,
China, Turkey, Thailand).
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(b) The possibility of acquiring the outside shareholding in
SkAadauvisk- This is being kept under review but it does not
appear practicable to pursue it at present.
(c) The possibility of improving the representation in Italy
(considered by Mr. Bruall and Kr. Pritchard).
9. moment Daveloi
.Lmaent
Although not specifically covered by the tame of reference, it has
been suggested that the team nay wish to consider the potential for
improvements in the arrangements for Manager Development, reviewing
the contribution made by the courses at Chalwood and considering
whe It would be advantageous to organiss. more transfers between
Tobacco companies in different Operating Groups in order to accelerate
the development of the msr@aaers concerned and to benefit from the
greater exchange of knowledge and experience which should result.
This has therefore been included on the Agenda.
10. Conclusion
Most of the items detailed above can be dealt with relatively
briefly.
However, it is anticipated that there will be more substantive
discussion on the following issues:-
(&) R & D (Xntroduced by Mr. Heard).
(b) Europe 1992 (Introduced by Mr. Bruall and Mr. Bramlay).
(c) Exports (Introduced by the Chairman and including consideration
of the paper from Souza Cruz an Brazilian Exports).
(d) Management Development (Introduced by the Chairman).
RS/DJA
27 th October 1985
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BAT Industries document for Province of British Columbia 22 April 1999