Tobacco Documents Online

~ ,<i' ~ DRAFT -- 9/27/91 ....... ~ Statement of Charles O. Whitley • ~ ~0 on b~alf of ~~ ~e Tobacco Institute ..: ~..~ before the ...... ' Co~ittee on Co~erce, Science & Transpo~ation ~: United States Senate ..... ' October 1991 ~ai~an, distin~ished m~ers of the co~ittee and foyer collea~es from the other body, I appreciate this opportunity to testify on S.I088, the "Tobacco Product Eduction and Heal~ Protection Act of 1991." S.I088 would create out of the existing Office on Smoking and Health a new bureaucracy -- a Center on Tobacco and Health within ~e C~ters for .Disease Control, increasing its funding seven-fold, from-$3.5 million to $25 million in the first ye~. This new C~t~ would be tasked wi~ providing info~ation about tobacco use and conducting multimedia counteradv~tising campaigns. The bill would establish a "M~el State Pro~am" to make ~ants for activiti~ desired to discourage young people from smoking. It would also establish a grant-making system for public and nonprofit entities for educational efforts to reduce tobacco use among the working population. ~~, S.I088 would re~ire disclosure of tobacco product ingredients and "additives" to the Secreta~ of ~S and reporting 1 CONFID ,NTIAL: TIMN 366161 MINNESOTA TOBACCO LITIGATION

DRAFT of such ingredients in or on product packages. It would allow the Secretary to ban a tobacco additive by regulation. The bill would alter the package warnin~ labels already mandated by law -- to be enlarged to appear on the front and back panels and take up at least 20 percent of the space. Mr. Chairman, these requirements add up to a costly new federal antismoking bureaucracy to engage in propaganda, regulation and spending without any legitimate rationale. We strongly oppose S.i088, which would do nothing to reduce smoking among youth or adults. Rather, it would ill-advisedly use the power of the federal purse to coerce states into a national antitobacco crusade. It would authorize regulation of tobacco product ingredients. ~_ even though there has been no suggestion of health concerns ~ ~ the compr~ensive ingredi~'lt infozn~tion already supplied to the Secretary of HHS. It would require public disclosure of ingredient information without regard to trade secret status and authorize "counteradvertising" campaigns that raise serious First Amendment S.I088 is costly and duplicative. While its goals may be co_mmendable, its methods amount to an irresponsible use of limited taxpayer dollars. Since the bulk of the bill addresses educational campaigns to curb smoking, I would like to address that aspect first. Let me begin by bringing you up to date on the tobacco industry's initiatives to curb youth smoking. 2 CONFIDENTIAL: OT,X TOa,XCCO t,rnG,x IO TEVIN 366162 •

DRAFT Industry Youth Initiatives Daily smoking among young people is declining. In 1987, 19 percent of high school seniors identified themselves as daily smokersI while in 1990, 17.7 percent said they smoked on more than 25 of the 30 days preceding the survey.2 Last month the Centers for Disease Control released a new study which found that one-third of our high-school students have used tobacco. The study found that more white students used tobacco (41.2 percent) than Hispanic (32 percent) or black (16.8 percent) students. And that 13 percent of students used cigarettes frequently. Mr. Chairman, members of the subcommittee, and everyone present, I am here to tell you that the tobacco industry opposes youth smoking. We do not want, nor have we ever wanted, underage youths buyin~ or using our products. The tobacco industry has long held the belief that smoking is an adult decision. We have a thirty year history of efforts to discourage young people from smoking. Last year we increased our efforts considerably.~^~ , ~0| The industry s advertising and promotion code has been significantly strengthened. Recent revisions to the Code include: Cigarette product samples will not be distributed in or on i Reducing the Health Consequences of Smoking, 25 Years of Progress, a Report of the Surgeon General, 1989. 2 Youth Risk Behavior Survey, Centers for Disease Control, 1991. 3 CONFmv. : TIMN 366163 '-- ..... : MINNESOTA TOBACCO LITIGATION --

DRAFT public streets, sidewalks or parks, except in areas open only to persons to whom cigarettes lawfully may be sold. No product samples will be given to persons under 21, even if state law allows the sale of cigarettes to them. No mail distribution of product samples will be made without written, signed certification that the addressee is 21 or older, a smoker and wishes to receive a product sample. Distribution of nontobacco premium items bearing cigarette brand names, logos, etc. is limited. Mail distribution requires a written, signed certification that the addressee is 21 or older, a smoker and wishes to receive the premium. Other distribution of nontobacco premium items will only take place to persons 21 or older, or with the purchase of a package or carton of cigarettes. Paid product placements in movies have been formally eliminated. There will be no cigarette advertising on billboards within 500 feet of schools and playgrounds. CONFIDENTIAL: MINNESOTA TOBACCO LITIGATION 366164 .....

• DRAFT We are supporting new state laws setting a minimum age of 18 for the purchase of tobacco products. [Visual Aid: graphic showing passage of laws, states yet to pass legislation.] Since we launched the program last December, we have supported the successful passage of laws in Louisiana and Wyoming, where 18 was established as the minimttm age; and in North Carolina, Vermont, Virginia and the District of Columbia, where the age was raised to 18. But we're only halfway there. Next year we hope to see the successful passage of laws in Delaware, Georgia, Kentucky, Missouri, Montana and New Mexico. In addition, the industry is supporting state legislation requiring supervision of cigarette vending machines in places frequented by minors. [Visual Aid: graphic showing vending supervision.] Vending machines are not a prima.ry source of cigarettes for teens.3 In fact, the majority of these machines are in places not frequented by minors, such as bars, factories and workplaces.4 We believe supervision is a responsible step Twenty-two percent of 13 year olds and two percent of 17 year olds say they purchase cigarettes through cigarette vending machines. Findings for the Study of Teenage Cigarette Smoking and Purchasing Behavior, National Automatic Merchandisin~ Association, June/July, 1989. 4 Of the total number of cigarette vending machines, 70 percent are in bars, cocktail lounges, industrial plants and offices. A further 7.5 percent are in hotels, motels and universities and colleges, for a total of 77.5 percent located in places where minors are not, or should not be, present. Restaurants account fo 13 percent of cigarette vending machine locations. The remaining 9.5 percent are found in service stations; government, military and retail stores; transportation terminals; recreation and bowling centers and other miscellaneous 5 CONIqD~: MINNESOTATOBACCO L~IGA~ON TIMN366165

DRAFT to curb the few young people who do buy cigarettes from unsupervised machines. Devises such as lock-boxes, or tokens, require direct contact with store personnel and would help to r-~,~" those underage from purchasing cigarettes through vending machines. Having these laws on the books isn't enough. Observing the law is a powerful deterrent to youth smoking. We want to control access to cigarettes, and I am pleased to share with you an almost year-old program sponsored by the industry and spearheaded by The Tobacco Institute: "It's the Law." [Visual Aid: graphic showing ItL materials in action. ] The "It's the Law" program is designed to assist the retailing and vending industries, and to enlist their support and cooperation in discouraging the sale of tobacco produc~s to those who are underage. In the three states where the minimum purchase age is 19, and the 41 states and the District of Coln~ia where it is 18, we are providing -- free of charge -- educational materials and colorful signs and decals to all stores selling tobacco products, to help observe state laws regarding the sale of cigarettes. Our position is that these laws can and should be observed. Over i00 cosponsoring organizations have joined with The . Institute to help distribute these materials. With me today is , who directs . Mr. would be happy to address any questions you might have on this subject and com~nent on the impact of the program in his state. We have sent areas. NAMA study, March, 1986. CONFIDENTL4L: OTA TOBACCO L IGAnON TININ 66 66 ....

DRAFT out over 550,000 (all distribution figures will be brought up to date) signs, decals and buttons to thousands "of stores in every state having 18 or 19 as the minimum age. [Examples.] The efforts I have described address curbing youth access to cigarettes. We want to stop the supply of cigarettes to young people, and we also want to ~ youth~f~T od~ product. The unhappy fact is that some young people will smoke. Research shows that peer pressure is one of the primary reasons they do. Peer pressure can be positive - for instance it inspires healthy competition scholastically and in sports. But other times it is ~ In order to enable young people to resist negative peer pressure, The Tobacco Institute asked for the help of respected educators from around the country in preparing a booklet for parents to use to help their children cope with peer pressure. The result is "Tobacco: Helping Youth Say No," the third in a series of publications addressing peer pressure made available by The Tobacco Institute. The booklet offers practical advice and actual techniques parents, educators and other concerned adults can use in talking to young people about smoking. "Tobacco: Helping Youth Say No" is being promoted by The Family COURSE Consortium, a group of educational experts and organizations who have joined together to promote family values and the importance of communication in helping young people develop into responsible adults. With me today is , CONFIDENTIAL: MINNESOTA TOBACCO LITIGATION TIMN 366167

DRAFT (list credentials) a member of the Consortium, who will discuss the Consortium' s activities. over 150,000 copies of "Tobacco: Helping Youth Say No" have been distributed to parents, school counselors, teachers, administrators and civic and youth group leaders over the past nine months. You may have seen an advertisement offering the booklet in Parade, People, McCalls, Better Homes & Gardens, Ebony, or ~ other major magazines the ads are running in. It is available by writing, or calling an 800 number to place an order. or perhaps you may have heard about our new program on the news or read about it in your local paper. We have been to over 65 cities around the country so far this year to discuss with the media the industry's latest initiatives to prevent young people from smoking. Here's what people are saying about us: [Visual Aid- TIHYSN with quotes. ] give appropriate quotes from attached sheets. The Role of A~vertising Finding number II of S.I088 states that "convincing evidence demonstrates that tobacco advertising creates market expansion and retention." Mr. Chairman, this is not the case. In fact, the role of advertising was put to the test in the recent Canadian decision to overturn that country's three-year-old tobacco ad ban. Not only was the law declared in violation of the Canadian Charter, because the Court affirmed that advertising CONFIDENTIAL: MINNESOTA TOBACCO LITIGATION TIN[N 366168

DRAFT of tobacco products is protected expression, but the Court rejected the Canadian government's argument that banning tobacco advertising reduces consumption. In ruling on the case, Quebec Superior Court Justice Jean-Jude Chabot said, "there isn't any proof that advertising itself is a danger to public health. As Aristotle once said, the word 'dog' never bit anyone."5 Furthermore, former Surgeon General Koop acknowledged that cigarette advertising and promotion have not been shown to increase the level of tobacco consumption. ~e stated in 1989: "There is no scientifically rigorous study available to the public that provides a definitive answer to the basic question whether advertising and promotion increase the level of tobacco consumpt£ Michael Pertschuk, the former chairman of the Federal Trade Commission who now helps direct the antismoking lobby, stated in 1983 that "no one really pretends that advertising is a major determinant of smoking in. this country or any other. ,,7 Similarly, the Ontario Task Force on Smoking acknowledged in 1982 that "no persuasive empirical evidence exists" to support the contention that advertising is a significant determinant of 5 Canada's Tobacco-Ad Ban is Overturned by Judge, Wall Street Journal, July 29, 1991. 6 U.S. Department of Health and Human Services, Reducing the Health Consequences of Smoking: A Report of the Surgeon General, 512 (1989). 7 Tobacco Issues, Institute of Politics, Harvard University, April 27, 1983, Tr. 8-9. 9 CONFIDENTIAL: MINNF.,SOTA TOBACCO LITIGATION 366169

DRAFT smoking,s Likewise Elizabeth Whelan of the American Council on Science and Health stated in 1985 that an advertising ban would "probably not" reduce cigarette consumption in this country.9 If tobacco advertising were to create market expansion, as stated in this finding, then one would expect to find more smoking in those countries that allow such advertising than in countries where tobacco advertising is banned. Yet "evidence from other countries suggests that banning tobacco product advertising has not discouraged smoking," according to the President's Council of Economic Advisers in 1987.10 Even more significantly, tobacco product consumption -- both adults and young people -- is declining in many countries where advertising is permitted, including the U.S., while increasing in many countries where advertising is prohibited. The tobacco companies advertise to attract, brand switchers and retain brand loyalty. Finding ntumber II of this bill cites this as being the reason the tobacco industry "claims" is the p~rpose of advertising, then goes on to state that "only" i0 percent of smokers switch brands. Mr. Chairman, the cigarette market has annual sales of about $40 billion. Gaining a single market-share point means garnering $400 million in sales and -- equally important -- preserving a single market-share point means 8 Task Force on Smoking, Smoking and Health in Ontario: A Need for Balance 104 (1982). 9 "Second Thoughts on a Cigarette-Ad Ban," Wall Street Journal, December 18, 198S, at 28, col. 6. 10 Economic Report of the President (1987) at 196. i0 CONFIDENTIAL: MINNESOTA TOBACCO LITIGATION 3661'70 .--

DRAFT keeping nearly $400 million in sales. Suddenly, that "mere" 10 percent of brand switchers become a very important audience. ~ Medel State Program Under S.I088 a "Model State Program" would be established with several goals and specific criteria to encourage states to prevent tobacco use by minors. Mr. Chairman, no one should suggest that state and local governments need federal encouragement in this area. State and local jurisdictions are on record as having local tobacco taxes, local advertising Aa~s, sampling bans, sales and smoking restrictions. Moreover, the "Model State Program" as defined in S.I088 mirrors what the tobacco industry itself is already doing. I've given you a~ overview of our youth initiatives; I'd like to walk you through a side-by-side comparison of the tobacco industry [Visual Aid: youth initiatives and the "Model State Program." side-by-side comparison. ] The "Model State Program" is designed to prevent initial use of tobacco products by minors. Our program helps p~ven~ youth access to tobacco products. The "Model State Program" would encourage cessation of tobacco use by youth and others, including "high risk" categories. Our program is designed to discourage young ii CONFIDENTIAL: .............. OTA TOBACCO Lm6AT ON .... TIMN 366171

DRAFT people from smoking. The "Model State Program" would implement and enforce a prohibition on the sale of tobacco products to minors. Our program Implements and encourages a prohibition on the sale of tobacco products to minors. In the proposed "Model State Program," to qualify for a federal grant, a state must: o have in effect a law prohibiting the sale of tobacco products to those under 18. The industry supports such laws, and supported the successful passage of them in six states just this year. o improve enforcement of this law. The industry's "It's the Law" program does this. o have in effect a law intended to reduce youth access to cigarette vending machines by minors. The industry supports state legislation requiring supervision of cigarette vending machines in places frequented by youth. o improve enforcement of this law. s the Law," coupled with industry support for the use of tokens, lock- boxes, etc., works to achieve this end. o have in effect or seek to establish a law prohibiting the distribution of free samples of tobacco products. As I mentioned earlier, Mr. Chairman, the industry voluntarily has banned sampling on public streets, 12 CONFIDENTIAL: MINNESOTA TOBACCO LITIGATION TIMN 366172

DRAFT sidewalks and parks, and does not give samples to people under 21. F~ther, the indust~ progr~ offers "Tobacco: Helping You~ Say No," to deal with peer press~e, which Und~ this p~ovision of S.i088, compliance wi~ laws to prevent youth access to cigarettes would shift from law enforc~ent agencies to p~lic health authorities. Today, 47 states and ~e District of Col~bia have laws~' ~e sale of tobacco products to minors. Those laws can and should be enforced -- by law enforcement officers whose duty it i~ to uphold ~e law. Moreover, it should not be the role of ~e federal gove~ent to usu~ the powers and prerogatives of state and local government~. The $25 million allocat~ for 1992, with the promise of additional fun~ for 1993 and 1994, throws money at an issue already e~eri~cing nationwide att~tion. In addition, it would duplicate ~e effo~s of ~e ve~ indust~ it is t~ing thwart ~~ge co=itted to o= pro~am to reduce ~e supply,_ _nd .~ tobacco products by minors. Some may ~estion our motive, but it's really ve~ simple: the tobacco indus~y does not want, nor has it ever wanted, ~derage youth to smoke. We have vol~tarily end~ free distribution of product s~ples in p~lic. We have vol~t~ily stopped cigarette bill~d 13 CONFIDENTIAL: MINNESOTA TOBACCO LITIGATION 366173 " -

DRAFT advertising near schools and playgrounds. We are firmly behind raising the minimum age to 18 and requiring supervision of vending machines. We are giving parents the educational tools they need to talk to their kids about smoking and are working with professionals to develop more. We are working with retailers to make it tougher for minors to buy tobacco products. And we are conducting a multi-year advertising campaign to broadcast our program and our message. Mr. Chairman, I find myself in the unusual position of saying to you that the tobacco industry is already working to achieve the goals of Senator Kennedy's bill. Anti-Smoking Advertising Campaigns S.1088 would establish two new federal bureaucracies within the Department of Health and Human Services. One of these would administer anti-tobacco "information" and "education" programs, including the Model State incentive program I've already discussed as being unnecessary,~--~h~-i~-~. Mr. Chairman, the industry supports the goal of this legislation to reduce the number of young people who smoke, and I agree that realistic, responsible action should be taken to prevent them from smoking. This bill has a price tag of $110 million for 1992 alone. That's a lot of money to spend when there are already huge amounts of anti-tobacco information and negative media coverage out there. Public awareness levels regarding smoking almost 14 CONFIDENTIAL: MINNESOTA TOBACCO LITIGATION TIMN 366174 "

DRAFT reach the point of saturation now.11 Frankly, we can't expect a new counter-advertising campaign to increase what are already very high levels of awareness. We do need to make sure our children are as well-informed as they can be. The same anti-tobacco advertising campaign that's been going on since the first Surgeon General's report has reached kids and adults alike. Ever since that report was first issued over 25 years ago, federal health officials and other policymakers have actively warned the public about health risks allegedly associated with smoking. State and local governments, as well as anti-smoking organizations and individual activists, have joined this crusade against tobacco use by dedicating their efforts toward reducing the n1~mber of people who smoke. The anti-tobacco lobby also has turned its attention to youth smoking in recent years, developing outreach programs and educational camgL~igns designed to teach children about the health ef-~ee~s~associated with smoking. And students are getting the message in the classroom. A 1988 National School Boards Association survey of public school districts found that 75 percent have anti-smoking programs at the elementary level, 81 percent at the middle school level and 78 11 Five years ago, an HHS survey showed that not only had the American public heard that smoking posed a health threat, but 95 percent be~i..eved that cigarette smoking increased the risk of lung cancer. Messages about other health hazards linked to smoking also were received -- 92 percent believed it increased the risk of emphysema and 91 percent believed it increased the risk of heart disease. Most Americans also b~lieve that second- hand smoke is harmful to nonsmokers. 15 CONFIDENTIAL: TIMN 366175 MINNESOTA TOBACCO LITIGATION

percent at the high school level. The pttblic information campaigns that would be conducted under this bill are directed to '~., school dropouts, pregnant women, minorities, blue collar workers and low income individuals." It seems to me the assumption here is that cigarette advertising improperly "targets" these groups. Mr. Chairman, I find this attitude paternalistic and condescending. The underlying implication is that these groups are in need of special protection because they can't determine their own best interests. It is not the function of government to play "Big The CaliZornia ~xperience The State of California began a $28.6 million mass-media anti-smoking campaign in April of 1990, as part of a 1988 cigarette-tax initiative According to state officials, the ad campaign has reduced smoking in that state. Statistics show that the percentage of adults in California who smoke went from 26.3 percent in 1987 to 21.2 percent in 1990. Reports attribute the 5.1 percent drop in smoking directly to the anti-smoking educational initiative. Based on this, other states are now seeking to emulate the California example, in an effort to reduce smoking in their states. But let us examine the real reason smoking rates declined in California. The ad campaign was part of a larger initiative, which included a 25-cent increase in the state's cigarette tax (from 10 16 CONFIDENTIAL: TObaCCO TININ 366176

DRAFT to 35 cents per pack). That increase took effect in 1989, prior to the ad campaign. By examining cigarette sales statistics for the period of 1987-1990I2, a completely different pictm:e emerges. Between 1987 and 1988, there was a one percent drop in purchases; from 1988 to 1989 a 13 percent drop; and from 1989 to 1990 sales remained virtually static, rising by six-tenths of one percent. SO in ~e year prior to the tax ~ncrease, sales fell by one .~;~,;<7~erc~t, then ~opp~ ~a~tically by 13 percent after the t~ ?~ncrease took effect, an~ beZore the ad ca~aign was latched. • ~learly, the decline in smoking cannot be attribut~ solely to ~.~e ad c~pai~, as ~e decline cached before ~e ads were It ~s unfort~ate ~at the statistics have been so skew~ ~ere. ~is is an attempt tu claim success by falsely attributing a costly anti-tobacco advertising c~paign and hiding ~e real cause of the decline in smoking. It is misleading to ~uggest that o~er states would experience similar declines in smoking if they were to adopt an anti-smoking adve~ising c~paign, got only is it misleading, but it is a dissa~ice. I would strongly reco~d ~at ~e California adve~ising example be e~osed for what it is: a costly priam that did not alter smoking habits. 12 Based on the Monthly State Cigarette Tax Report for calendar years. 17 CONFIDENTIAL: MINNESOTA TOBACCO LITIGATION TIMN 366177

DRAFT Zn~ed~ent and ~dd~t~ve D~scZosu~e I mentioned earlier that two new bureaucracies would be created under the provisions of S.I088. The first would, in the words of Senator Kennedy, "get the anti-smoking message to the nation.''13 That is, to a nation that already knows the message. ¢~ The other new agency would administer a program regulating ..~.~"additives" -- even though the safety of additives is currently the responsibility of the Secretary of HHS under existing law and there has been no suggestion of health concerns based on the ~additive information supplied to the Secretary by the cigarette manufacturers over the past several years. The Center for Tobacco Products would be directed to inform the public regarding constituents of, and additives to, tobacco products, and to restrict the use of additives that represent a Significant health risk to the public. The Center would be directed to investigate the additives contained in tobacco products and to determine whether such additives represent a significant added health risk to consumers of such products. If the Center determines that any tobacco additive, either by itself or in conjunction with any other additive, presents unnecessary increased risks to health, the Center would be authorized to prohibit the use of a tobacco additive or allow its use only at reduced levels. Further, the Center would be directed to require public 13 Kennedy press release, details tk 18 CONFIDENTIAL: MINNESOTA TOBACCO LITIGATION ~ 366178

DRAFT disclosure, through labels or package inserts, of tobacco product additives and "harmful tobacco smoke constituents " Cigarette manufacturers would be required to provide to the Center a complete list of each tobacco additive used in the manufacture of each tobacco product brand name and the ~antity of such additive, and a complete last of all brands ~at includes the levels of "tar," nicotine, carbon monoxide, and other constituent (as dete~ined by the Center) for each brand as dete~ined by ~e ~nufa~er. ~. ~ai~an, many of these provisions sustantially duplicate existing law. To the e~ent these provisions would =hange existing law, the change would sere no d~onstrable policy objective. ~ese provisions also .would threaten public dis=fosse of c~ercially sensitive info~tion that cu~ently is protected from public disclosure as .trade se~et or confidential info~ation. Su~ disclos~e would produce no public benefit. Under ~e Compr~ensive Smoking Education Act, enacted in 1984,. the cigarette manufact~s ~e re~ired to provide the Secret~ of ~S on an a~ual basis "a list of the ingredients added to tobacco in ~e manufa~e of cigarettes." 15 U.S.C. section 13~Sa(a). ~e list provided to the Secre~ need not identify the company involved or the brand o~ cig~ettes that con~ins ~e in~edients. (Ibid.) Congress considered the disclos~e o~ cigarette in~edient info~ation on this basis to be ade~ate to "pe~it ~e fed~al gove~ent to initiate ~e 19 CONFIDENTIAL: MINNESOTA TOBACCO LITIGATION TIMN 366179

DRAFT toxicologic research necessary to measure any health risk posed by the addition of additives and other ingredients to cigarettes during the manufacturing process." H.R. Rep. No. 805, 98th Cong., 2d Sess. 21 (1984). The Secretary, in turn, is directed to transmit to Congress periodic reports advising Congress of any information pertaining to such ingredients "which in the judgement [sic] Secretary poses a health risk to cigarette smokers." lid. Section 1335a(b)(i).] Each year since 1986, the six major cigarette manufacturers have jointly submitted ingredient lists to the Secretary as required by the 1984 legislation. The most recent list was submitted just this past December (check on this) In 1988, then-Surgeon General Koop indicated that the Department of HHS was actively reviewing the ingredient lists that had been submitted. There is no reason to believe that this existing review mechanism is inadequate and .needs to be expanded or replaced. Neither is there any justification for requiring public disclosure of tobacco additives. Because information concerning the ingredients used to manufacture particular cigarette brands is competitively sensitive, Congress provided in the Comprehensive Smoking Education Act that the ingredient information supplied to the Secretary "shall be treated as trade secret or confidential information." Such information is exempt from disclosure under the Freedom of Information Act and criminal penalties are established for unauthorized disclosure. [15 U.S.C. Section 1335a(b)(A).] The Act specifically requires the 20 CONFIDENTIAL: '~ MINNESOTA TOBACCO Lrn6AT ON TIMN 366180 .....

DRAFT Secretary to establish "written procedures to assure the confidentiality of such information." [Id. Section 14 1335a(b) (2) (C).] And he has done so. In 1984, Congress considered and rejected public disclosure of ingredient information -- and for good reason. As originally introduced in the 97th Congress, the House version of the legislation ultimately enacted in 1984 would have required ingredients to be listed on cigarette packages.15 Opposing such a requirement, The Tobacco Institute's witness explained: "Cigarette manufacturers use a variety of ingredients to enhance flavor and appearance and preserve shelf life. These ingredients are among each manufacturer's most closely held trade secrets. There is no justification for denying cigarette manufacturers the trade secret protection extended to every other consumer product industry. ,,16 The Institute's witness also pointed out that requiring package disclosure of additives, "combined with the...health warnings and tar, nicotine and carbon monoxide numbers, would turn cigarette packages into little textbooks, likely causing smokers to ignore it all." (Ibid.) Congress responded to these objections in the 1984 legislation by providing trade secret protection to the ingredient information supplied to the Secretary. In addition, 14 See 50 Fed. Reg. 49,617 (1985). 15 H.R. 5653, 97th cong., 2d Sess., p. 7 (March i, 1982). Comprehensive Smoking Prevention Act: Hearings on H.R. 5653 and H.R. 4957 before the Subcomm. on Health and the Environment of the House Comm. on Energy and Commerce, 97th Cong., 2d Sess. 335 (1982) (testimony of Edward A. Horrigan, Jr.). 21 CONFIDENTIAL: ~_ MINNESOTA TOBACCO LITIGATION TEV[N 366181

DRAFT it made clear that ingredient information was to be submitted to the Secretary in a manner that does not identify the company involved or the brand of cigarettes containing particular ingredients . The considerations that supported Congress's decision to treat ingredient information that way in 1984 remain valid today. Warnimg Label Requirements Finally, Mr. Chairman, I'd like to address the bill's proposed changes in cigarette warning labels. Cigarette packaging and advertising currently carry one of four government- mandated warning labels. The industry's advertising is regulated by the Federal Trade Commission. And, in addition, the industry adheres to a voluntary set of advertising standards. S.1088 stipulates replacing the carbon monoxide warning with an ;'addiction" warning. It also would require the warnings "to appear on the two most prominent sides of the product package on which the label is required, be in a size which is not less than 20 percent of the side on which the label is placed and include letters in a height and thickness which assures that the letters in the space provided for the statement will be no less legible, prominent, and conspicuous in size than other matter printed on the side of the package on which the label statement appears." The government has a responsibility to control advertising content to ensure it is not misleading or deceptive. But to cite tobacco as an "addicting" drug is in itself deceptive and 22 CONnDENT AL: TIMN 366182 MINNESOTA TOBACCO LITIGATION ....

DRAFT misleading. The Surgeon General's office indicates that 41 million Americans have q~it smoking. The 1989 Surgeon General's report states that nearly half of all living adults who ever smoked have quit. And the Public Health Service reports that 90 percent of these people have done so without outside help. This hardly sounds like figures for an "addicting" substance. It would also set a very dangerous roadblock in our war on drugs, by sending the message that smoking, like illegal drugs such as crack or heroin, is addictive. It would not be prudent to give young people the impression that the drug abusers they see on television or hear about on the news are no worse than parents, friends and neighbors who smoke. This warning label would dilute the message that hard drugs are dangerous, addicting and illegal. Also, the bill would dictate what a cigarette package would look like, by requiring a warning label covering 20 percent of the front and back panels of every cigarette package that is not less prominent than other printed matter. Each cigarette brand has unique packaging that serves as its identification - itself a form of advertising. Controling the content of all printed matter on the cigarette package would homogenize this information and reduce the ability of a manufacturer to promote his product through unique packaging design. Finally, requiring 20 percent coverage of both front and back panels would force an industry to stigmatize its own product. 23 CONFn)WNTIAL: TIMN 366183 MINNESOTA TOBACCO LITIGATION

DRAFT The intent of the Kennedy bill, Mr. Chairman, is to use the federal imprimatur to influence state and local actions. State and local governments, the nation's educational systems and citizen and consumer groups are taking considerable steps to ensure that the American public is informed about tobacco issues. The industry itself is taking responsible, positive steps to ensure that its ~roduct remains what it was always intended to be -- for adults only. This bill is costly, unwarranted and unnecessary. I would be glad to answer any questions. 24 CONFIDENTL~L: TIMN 366184 ...... MINNESOTA TOBACCO LITIGATION