Leaf Stock Durati- Pollev
We believe that the th-rati-Al nialaus leaf stock
duration
levels. for flue cured and barley tobac a. at the
beginning of
a particular buying season obould be
- for flavour grades 16 soutbs
- for tiller grades 10 sontba
rlavo= grades donand a h1gher stock level to allow
double
crop blending and a minims siz nonth &"Ing period
(five
cured); barley flavour grades. genonaly cased and
beat treated
in manufacture to ~liorata @=*Ing cbaractorlaties
e-
tolerate reduced agoing. Wbere poool%3L- 04"
which do not benefit from af-"
This is based an two unj
and Development, a second b7
former concluded that, based
measurements. ageing improve
tobaccos - particularly up w
concansus are important flavc
emphasized the importance of
flavo= grades (double crop t
consistency.
To *%tabltsh &-framework
4&-
theory, a schematic reprosenti
based on four assumptions
- total usage of tobac
50% filler grades
- double crop blending
- this double crop blen
range 75:25 to 2S:75
- the buying season Iasi
At its simplest. the theoret
durations. at the beginning of a
flue cured market recognizing th
blending, the need for ageing am
to filler grades at 50:50, would
- for flavour grades
- for filler grades
In this example the ageing pal
(when now crop is Introduced at 2!
four months (when the blend contai ax now crop).
Nora
than $00 of the tobacco will thus have been aged
for note than
twelve months prior to manufacture.
(-n
4 ~i,
OD
__4
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13 ATCO document for Province. Of BritiSh COIUMbla
23 April 1999


Leaf Stock Duratio" Policy
We believe that the theorstic-1 minim= leaf stock
duration
levels, for flue cured and burley tobaccos. at the
beginning of
a particular buying season abould be
- for flavour grades 16 months
- for filler grades 10 months
Flavour grades do-nd a h1gber stock laval to allow
double
crop blending and a minim= siz month ageing period
(flue
cured); burley flavour grades, generally cased and
beat treated
in nan:ufacturo to ameliorate smoking
characteristics can
tolerate reduced ageing. Wbers, possible, filler
tobacc,
which do not benefit from ageing, should be
'dovetailed'.
This is based on two unpubliE-A&d reviews - one by
Research
and Development, a second try Leaf Depart-out
Millbank. The
former concluded that, based on objective and
subjective
measurements, ageing improved the wboking quality
of
tobaccos - particularly up *talk grades (which. by
general
conce-nsus are important f lavour grades). The
latter review
emphasized the importance of using at least two
crop years of
flavour grades (double crop blending) to ensure
product
consistency.
To establish a framework for the application of
the above
theory, a schenatic representation. given in the
Appendix A, is
based on four assumptions
- total usage of tobaccos Is 50% flavour grades:
50% filler grades
- double crop blending is essential for flavour
grades
- this double crop blending is within the
percentage
range 75:25 to 25:75
- the buying season lasts four months.
At its simplest, the theoretical minimum leaf
stock
durations, at the beginning of a buying season In
a totally
flue cured market recognizing the need for double
crop
blending, the need for ageing and taking the ratio
of flavour
to filler grades at 50:50. would be. an previously
stated.
- for flavour grades 16 months
- for filler grades 10 months.
In this example the ageing period will vary from
six months
(when new crop is introduced at 25% of the blend)
to twenty
four months (when the bland contains 75% of new
crop). More
than 80% of the tobacco will thus have been aged
for more than
twelve months prior to manufacture.
LN
C)
41-
C0
BATCO document for Province of BritiSh Columbia 23
April 1999


- 2 -
In oractice. however. when we attempt to expand on
the
above promise, we must consider six factors in
formulating a
general policy on leaf stock durations:-
1. The need for double crop blending.
2. The need to age tobaccos.
3. The bland six of flavour and filler grades.
4. Types of tobacco (flue cured, burley,
oriental).
S. The origin of tobaccos (domestic; Imported;
six).
6. Security of supply.
Within BAT operating companies, and still
considering only
flue cured and burley tobaccos (in strips) we
:%ave three
a ituations (point 5) which have an impact on our
leaf stock
duration policy
- where all tobacco is of domestic origin
- where all tobacco is imported
- where tobaccos are partly of domestic origin.
partly
imported.
Whi Is each situation demands an individual
duration policy
(as per examples below) we would expect ac-cual
average
durations (across !lavour or filler tobaccos) to
be within plus
or minus two months of the previously stated
levels i.e.
- for flavour grades 16 months
range 14 to 18 months
- for filler grades 10 montbx
range 3 to 12 months.
Each and every BAT operating company, but
particularly
those using domestic tobacco, should examine the
specific local
circumstances which could have an impact on leaf
stock duration
policy, before establishing a sensible and
workable 'modus
operandi'. The most important constraints which,
In our
opinion, give rise to the need to accept such
ranges are given
in Appendix B.
Situation I - all tobacco of domestic orialn
Flue Cured 16 months flavour grades
12 months filler grades
Burley 14 months flavour grades
12 months filler grades
LN
2 _11
CO
BATCO document for Province of BritiSh Columbia 23
April 1999


3
Notes
a. Durations of filler grades have b"n increased
from the
theoretical 10 months to 12 sonths to allow for
crop
fluctuations (t 101) and the ability to recover f
any lose in the following a
b. Given that the plant produces a known and
fairly
constant flavour:filler ratio in any specific gzcm
ng
area, an increase in filler durations could affect
flavomr durations unless the usaip pattern is
modified.
Situati- 2 - all tobacco, Imoorted
Flue Cured 16 months flavour
8 months filler
Burley 14 months f 1 avocLr
8 months filler
Notes
a. Durations of filler grades have been reduced
free the
theoretical 10 months to 8 months to raflact the
ability to overcome shortfalls by substitutitg
another
country of origin.
b. Durations cuat include all committed stoc.X (it
stockpile countries of origin and in transit) as
well
as stock with the end user.
C. Where large quantities are imported, frcm a
wide range
of origins, it is possible to achieve product
consistency through this diversity rather than
slavishly adhering to double crop blending.
Situation 3 - tobaccos Dartlv of dozqestic oricin.
~~artlv
i-Dorted
Flue cured 16 months flavour
12 months filler
Burley 14 months flavour
12 months filler
a. Flavoux grades are generally imported; filler
grades
come from domestic production.
In addition to flue cured and burley, there are
two otbar
important raw saterials.
LN
Qn
.M.
CO
BATCo document for Province of British Columbia 23
April 1999


4
1. Oriental tobacco
Oriental tobacco can be regarded as being at least
twelve
months 'old' before it Is shipped from the
particular try
of origin. Leaf stock duration policy can
therefore be based
sisply an the used to dovetail crop years, on
shipping tims
and on Security of supply.
Those BAT operating ies using our stockpile, no"
OCLIT
bold a &"in= of three months stock - given regular
shipping
opportunities.
2. film
Where tobacco is of domestic origin, stem duration
policy,
should mirror that of strips. 'Ageing is not
required but
security of supply to essential (processing yields
do vary).
Wher.; tobacco is Imported, companion stem should
be taken
unl there is an available domestic source of
acceptable
quaelsitsy and imported cost prohibitive.
There is a shortage of good quality stem and hence
Stan usage
should be geared to the expected stem out-turn;
where stem
usage exceeds out-turn, any short!all will be
extreAely
diffic,alt to fill.
Certain RAT operating COMPaniC3, however, use
other types of
tobacco (e.g. Maryland, air cured and fire cured).
The basic
principles of leaf stock duration policies for
burley tobaccos
outlined above, should be applied although
consideration must be
given to the 'uniqueness' of cer-tain tobaccos.
While we have outlined different leaf stock
duration policies
for different tobaccos (flavour/filler; types;
countries of
origin) these are all based on e-stablishing the
timing of the
'beginning of the buying season'. Where tobacco is
of domestic
origin each RAT operating company must establish
the particular
date or dat Where tobac--s
I w1wharzedifferent types are used).
are =ported bel ve all RAT operating companies
should use
the same 'beginning of the buying season' data for
each of tha
mAjor flue cured and burley world tobacco markets.
(Appendix C).
Summary
We expect to see overall durations - regardless of
flavour/filler, type and origin, aicross all RAT
operating
companies, varying betweez 22 and 16 months at the
beginning of a
buying season.
18.4.90.
UN
a)
4 :2..
CD
BATCo document for Province of British Columbia 23
April 1999