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Corporate Affairs in EEMA is Different...

Date: 1991 (est.)
Length: 35 pages
2500120503-2500120537
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Abstract

This 35-page document from Philip Morris' (PM) Corporate Affairs Office describes in detail the company's vas, wide-ranging strategies to fight public health tobacco control efforts in countries across Europe and the Middle East. Topics discussed include fighting tax increases, countering the decrease in social acceptability of smoking, influencing legialators and officials from standards-setting bodies, and much more.

Not unexpectedly, one strategy was to influence government:

"...A FIRST STEP [to fight proposed restrictions on cigarette advertising in Poland] WAS A MEETING BETWEEN PM MANAGEMENT AND THE [Polish] MINISTER OF AGRICULTURE, AFTER WHICH THE LATTER BECAME AN ACTIVE SUPPORTER OF A VOLUNTARY CODE OF CONDUCT AS A VIABLE ALTERNATIVE TO STRINGENT RESTRICTIONS..."

Another strategy was to push a voluntary advertising code to legislators as a substitute for real restrictions on advertising:

"OUR THIRD STRATEGY POINT IS ALSO TO PRESENT AN INDUSTRY COUNTER-PROPOSAL IN THE FORM OF A VOLUNTARY ADVERTISING CODE...PM WILL EVALUATE THE BEST WAY TO PRESENT AND DEFEND THE CONCEPT OF A VOLUNTARY ADVERTISING AND PROMOTIONS CODE AS OPPOSED TO A LEGISLATIVE BAN."

Another strategy was to use sports sponsorships to influence the media, government officials and opinion leaders:

"IN TERMS OF PM SPONSORED SPORTING EVENTS SUCH AS F1, RALLYING, MOTORBIKING, BOATING AND GOLF, WE WILL BEGIN ACTIVELY USING THESE EVENTS TO FURTHER STRENGTHEN TIES WITH THE MEDIA, GOVERNMENT OFFICIALS, AND OPINION LEADERS."

PM also planned to work through smokers' rights groups. PM planned to increase funding for recruitment for these groups (like "Smokepeace" in northern Europe), to use them to create the appearance of a grassroots uprising against smoking restrictions, and use them as a vehicle to fight public health organizing around tobacco issues (e.g., with events like "World Smokepeace Day"). These events were planned to counteract the activities and influence of groups like the World Health Organization and the International Union Against Cancer.

User-Contributed Notes

  1. 73-middle east marketing. ustr. partly printed.

Fields

Quotes

(From Page 12):

1. MARKETING FREEDOMS.

TURKEY.

IN JANUARY OF THIS YEAR, THE ANKARA PARLIAMENT ADOPTED A BILL BANNING ALL TOBACCO ADVERTISING. FOLLOWING INTENSE PH AND INDUSTRY G.R. ACTION, PRESIDENT 0ZAL REFERRED IT BACK FOR REVIEW, THE BILL IS NOW UNDER DEBATE AT THE PARLIAMENT'S JUSTICE COMMISSION. OUR STRATEGY IS TO WORK CLOSELY WITH THE INDUSTRY,CONTINUE TO SUPPORT ALLIES LIKE THE MEDIA, AND LOBBY DIRECTLY THE COMMISSION MEMBERS WITH THEHELP OF NEWLY-HIRED TOP GR CONSULTANTS BASED IN ANKARA. WE WILL ALSO ESTABLISH CLOSER CONTACTS WITH THE MEMBERS OF THE JUSTICE COMMISSION TO HAVE OUR COUNTER-PROPOSAL ACCEPTED.

(From Page 14):

POLAND.

THIS IS QUITE AN INTERESTING EXAMPLE IN THAT IT HIGHLIGHTS THE TRULY INTERNATIONAL COALITION OF ANTI-SMOKERS, ALL TOO EAGER TO CONVERT FRESHLY LIBERATED TERRITORIES TO THEIR THEORIES.

THE ISSUE STARTED IN APRIL OF THIS YEAR. WE RECEIVED WORD THAT THE POLISH SENATE WAS DISCUSSING A NEW LAW WHICH WOULD TOTALLY BAN ADVERTISING,RESTRICT PUBLIC AND WORKPLACE SMOKING AND IMPOSE STRICT PRODUCT REGULATIONS, SUCH AS HWLs [Health Warning Labels].

THE BACKBONE OF OUR STRATEGY IS TO CREATE A COALITION OF INTERESTS WITHIN THE INDUSTRY, TO USE IN-MARKET LOBBYSTS (NOT A VERY COMMON ASSET IN TODAY'S POLAND)..AND TO SUBMIT A COUNTER-PROPOSAL IN THE FORM OF A VOLUNTARY CODE OF RESTRICTIONS.

PM's GOOD CONTACTS WITH PRESIDENT WALESA, THANKS TO GUY SMITH'S INITIATIVES, COULD PROVE VERY USEFUL WHEN THE TIME COMES TO DRIVE OUR POINT OF VIEW HOME...

IN TERMS OF CONCRETE ACTIONS, PM HAS SECURED INTERNATIONAL TOBACCO COMPANIES' COOPERATION ON THIS ISSUEIN EASTERN AND CENTRAL EUROPE. A FIRST STEP WAS A MEETING BETWEEN PM MANAGEMENT AND THE MINISTER OF AGRICULTURE, AFTER WHICH THE LATTER BECAME AN ACTIVE SUPPORTER OF A VOLUNTARY CODE OF CONDUCT AS A VIABLE ALTERNATIVE TO STRINGENT RESTRICTIONS... IN OTHER WORDS, WE HAVE CONVINCED EACH PARTNER OF HIS VESTED INTEREST IN THE ACCEPTANCE OF A VOLUNTARY CODE...

CURRENTLY, PM AND THE INDUSTRY ARE PURSUING THEIR LOBBYING EFFORTS IN LINE WITH SPECIFIC AND TARGETED SPONSORSHIP PROGRAMS...

(From Page 17):

SWITZERLAND

ONE OF THE HOST PROFITABLE MARKETS OF THE EEMA REGION, THIS COUNTRY WILL VOTE IN THE NEXT FEW YEARS ON A POPULAR INITIATIVE WHICH WOULD TOTALLY BAN ALL FORMS OF TOBACCO ADVERTISING...THE CA's [Corporate Affairs] STRATEGY TO DATE HAS BEEN TO SECURE THE TOTAL SUPPORT OF THE TOBACCO INDUSTRY IN THE BATTLE AGAINST THESE ADVERTISING RESTRICTIONS. THE STRATEGY INCLUDES CO-ORDINATED EFFORTS WITH THE AD INDUSTRY AND THE ALCOHOL INTERESTS.

IT ALSO AIMS AT SECURING THE SUPPORT OF BALANCED POLITICIANS FAVOURING REASONABLE SOLUTIONS VS BANS...

(From Page 24):

OUR THIRD STRATEGY POINT IS ALSO TO PRESENT AN INDUSTRY COUNTER-PROPOSAL IN THE FORM OF A VOLUNTARY ADVERTISING CODE...(from Page 25) ...WE WILL SEEK POTENTIAL ALLIES WITHIN THE OTHER MAJ0R INDUSTRY PLAYERS IN ORDER TO PROMOTE THE INDUSTRY'S POSITION DURING THIS PHASE...ON MAY 16, A MEETING WAS HELD WITH THE LOCAL MANUFACTURERS AND THE FCC DURING WHICH THE INDUSTRY PROPOSAL WAS SUBMITTED AS A POSITION PAPER AIMED AT COUNTERING THE PROPOSED LEGISLATION. ...NEXT, PM WILL EVALUATE THE BEST WAY TO PRESENT AND DEFEND THE CONCEPT OF A VOLUNTARY ADVERTISING AND PROMOTIONS CODE AS OPPOSED TO A LEGISLATIVE BAN.

(From Page 26):

THE FOURTH IMPORTANT ISSUE THAT CONFRONTS US IS ETS AND SMOKERS' DISCRIMINATION.

IN SWEDEN, THE MAGNUSSON COMMISISON RECOMMENDED IN MARCH 1990 THE ADOPTION OF A RESTRICTIVE TOBACCO ACT WHOSE MAIN PURPOSE IS TO PROHIBIT SMOKING IN SWEDEN'S PUBLIC PLACES AND WORKPLACES. THE ACT WOULD STRONLY LIMIT SMOKING IN ALL HOTELS AND RESTAURANTS.

OUR STRATEGY TO COMBAT THIS PROPOSAL HAS BEEN TO: ONE, ACHIEVE A JOINT INDUSTRY POSITION AGAINST THE COMMISSION AND SUBMIT IT TO THE MINISTRY OF SOCIAL AFFAIRS. TWO, DEVELOP AND DISSEMINATE CONTRASTING VIEWPOINTS ON ETS AND INDOOR AIR QUALITY IN ORDER TO COUNTER THE COMMISSION'S RECOMMENDATIONS AND SCIENTIFIC MISINFORMATION. THREE, MOBILIZE THIRD PARTY SUPPORT SUCH AS RESTAURANT OWNERS AND SMOKERS' RIGHTS GROUPS. THROUGH PUBLIC DEBATE AND PUBLIC OPINION POLLS, IN TERMS OF PM SPONSORED SPORTING EVENTS SUCH AS F1, RALLYING, MOTORBIKING, BOATING AND GOLF, WE WILL BEGIN ACTIVELY USING THESE EVENTS TO FURTHER STRENGTHEN TIES WITH THE MEDIA, GOVERNMENT OFFICIALS, AND OPINION LEADERS. AND THE GROUP HAS BEEN CONSULTED BY MR. MAGNUSSON.

(From Page 28):

SWEDEN IS NOT THE ONLY AREA WHERE ETS HAS BECOME A RAPIDLY BECOMING AN ISSUE OF CONCERN; IT'S RAPIDLY BECOMING AN ISSUE IN CENTRAL AND EASTERN EUROPE AS WELL. ANTI-SMOKING GROUPS LIKE IOCU, WHO AND IUCC [HAVE] BEGUN INCREASING THEIR ACTIVITIES IN THIS REGION...TO COMBAT THIS GROWING THREAT, OUR PRESENT STRATEGY CONTAINS FIVE ELEMENTS...

(From Page 30):

THE NEXT ISSUE I WOULD LTKE TO DISCUSS NOW IS SMOKING AND TOBACCO'S ACCEPTABILITY. IT IS A FACT THAT, IN MANY OF OUR MOST SOPHISTICATED MARKETS, SMOKING IS BECOMING AN INCREASINGLY ANTI-SOCIAL BEHAVIOUR, AS A CONSEQUENCE OF THE ANTI'S CONTINUOUS ATTACKS ON SMOKERS AND THE INDUSTRY.

CA's STRATEGY IN THIS REGARD IS TO ENHANCE AND PROJECT PM's CORPORATE IMAGE THROUGH A COMPREHENSIVE AND SYSTEMATIC GR PROGRAM. OUR STRATEGY ALSO INCLUDES THE CREATION AND IMPLEMENTATION OF PROGRAMS WHICH REFLECT, IN A POSITIVE WAY, THE CONTRIBUTIONS OF THE INDUSTRY TO STATE REVENUES, GROWERS, RETAILERS, SPORTS, AND CULTURAL EVENTS.

...REGARDING THE COMPANIES' CULTURAL AND SOCIAL SPONSORSHIPS, OUR GOAL IS TO RESTORE SMOKING ACCEPTABILITY BY BUILDING SMOKERS' CONFIDENCE AND BY PROJECTING PM'S GOOD PUBLIC IMAGE VIA COHERENT HIGH QUALITY SPONSOSHIP PROGRAMS...ALONG THESE LINES WE WILL CONTINUE OUR SPONSORSHIP OF THE PM FLOWER AWARD IN FINLAND IN 1992... OTHER EVENTS INCLUDE A TOP LEVEL JOURNALIST TRIP TO ARGENTINA AND BRAZIL IN 1992 AND OPERATION HARARE REPEATED...IN TERMS OF PM SPONSORED SPORTING EVENTS SUCH AS F1, RALLYING, MOTORBIKINGw BOATING AND GOLF, WE WILL BEGIN ACTIVELY USING THESE EVENTS TO FURTHER STRENGTHEN TIES WITH THE MEDIA, GOVERNMENT OFFICIALS, AND OPINION LEADERS.

CENTRAL AND EASTERN EUROPE AS WELL. ANTI-SMOKING GROUPS LIKE TOCU, WHO, AND UICC HAVING BEGUN INCREASING THEIR ACTIVITIES IN THIS REGION.

Company
Philip Morris (Altria Group)
Author
None stated. Found in the area of Philip Morris Public Affairs Ryebrook/Central Files (Corporate Affairs meeting)
Recipient
None stated. Format is a presentation, as for a group.
Region
Eastern Europe
Middle East
Africa
Type
SPCH, SPEECH, PRESENTATION
Litigation
Stmn/Produced
Named Person
Donner, J.
Ozal
Sjoeblom, M.
Smith, Guy L. IV (VP of Corp. Affairs at PM c.'85-90; Chair, TI Communications)
Guy Smith was employed with PMI. Smith was Chairman of the TI Communications Committee. (Source: CNM Tobacco Companies Personnel List). Headed PR company "Smith Worldwide" c. 1996.
Walesa, Lech (President of Poland)
Operation/Project
Project Harare
Named Organization
Alvin Ailey
Amer Finland
Ankara Parliament
Ato
Ca Hq Team
Covington & Burling (Tobacco Industry law firm)
Tobacco industry law firm. Was involved in organizing the Whitecoat Project.
Craft Today US
Eastern Europe Industry Working Group
Ec
Ec Commission
Eea
EEC (European Economic Community)
European Economic Community
Efta
Federal Communications Commission (U.S. government agency regulating TV, radio)
Enforced the Fairness Doctrine against the tobacco companies; required time be provided on TV, radio for anti-smoking commercials.
Federal Chamber of Commerce Finland
Federal Health Office
Finland Federal Assembly
Finland Health Ministry
Finland Ministry of Social Affairs
Finnish Ministry of Social Affairs
GCC, Gulf Council Countries
GCCFinancial + Economic Cooperation Com
GCC Health Ministers Council
GCC Health Ministers Council Conference
GSMO
Gulf Standards Org
Helsinki Comm
Hq Team
Information Comm Against Ad Bans
Intl Labour Org
IOCU
Joint Eema Eec + Pmi Ca Project Team
KGF, Kraft General Foods (owned by PM)
Lagerloefs
Langaard
Magnusson Commission
META
Middle East Working Group
National Manufacturers Association (Defense groups for cigarette companies worldwide)
In places around the world where these associations did not exist, the tobacco industry created them to help defeat public health efforts around tobacco.
Pan African Sub Saharan Industry Working
Parliament
Parliament Justice Commission Turkey
PM-Eema, PM-Eema
PMCS (Philip Morris Corporate Services (Belgium))
Run by Gerard Wirz. Organized PM's opposition to smoking restrictions in Europe.
PMI (See Philip Morris Inc.)
See Philip Morris Inc.
Polish Senate
Project Group Against Ad Bans
SASO
Smokepeace (Industry-supported smokers rights group in northern Europe)
Was used by the industry as a grass roots front group to support industry positions to public and legislatures
Smokepeace Day - set up by industry to combat World No Tobacco Day
Smokers Rights Group Sweden
SRG (Smoking Research Group)
1992 BAT's Smoking Research Group was formed in 1986 to carry out smoking and health research. SRG is also an acronym for "Smokers Rights Group."
Tekel
UICC, International Union Against Cancer
Uicc Conference Tobacco Free New Europe
US Agricultural Trade Office
USTR
West African Working Group
World Health Organization (Concerned with global public health)
International organization concered with public health worldwide
World Smokepeace Conference -set up by industry to combat world organizing on smoking and health issues
Subject
corporate
Corporate image
corporate intelligence
Corporate strategy
corporate structure
Corporate philanthropy (Company giving behavior)
The giving of money to causes by a company, usually in a manner that makes the company appear altruistic to the public. Corporate philanthropy is usually done to achieve public relations or political gains.
smokers' rights group
political interference
Political participation
health warning labels

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Page 1: vae42e00
1 CORPORATE AFFAIRS IN EEMA IS DIFFERENT - LIKE THE REGION ITSELF. I'D LIKE TO BEGIN BY OUTLINING WHAT I MEAN BY THIS STATEMENT, WHAT CONSEQUENCES IT HAS AND HOW WE APPROACH CA ISSUES. GOOD AFTERNOON. C1} THE EEMA REGION IS THE LARGEST GEOGRAPHIC OPERATING UNIT WITHIN THE PM FAMILY. THE RESULTING DIVERSITY OF MARKETS PRODUCES A RANGE OF CA ISSUES FROM i PUBLIC SMOKING IN AUSTRIA TO CLAIMS ABOUT TOBACCO f AND DEFORESTATION IN ZIMBABWE. THE REGION CONTAINS HIGHLY SOPHISTICATED COUNTRIES SUCH AS SCANDINAVIA/FINLAND WHICH HAVE SOME OF THE TOUGHEST ANTI-TOBACCO LEGISLATION IN THE WORLD, WHILE ANOTHER HIGHLY ADVANCED MARKET, SWITZERLAND, IS STILL VIRTUALLY SPEAKING UNREGULATED. AT THE OTHER ~ END OF THE SCALE EEMA COVERS COUNTRIES IN AFRICA WITH NO LEGISLATION AT ALL AND SOME, LIKE NIGERIA,, WITH ALMOST CALIFORNIAN TYPE RESTRICTIONS. ~ IT ALSO CONTAINS A VARIETY OF POLITICAL SYSTEMS FROM CONSTITUTIONAL MONARCHIES TO AUTHORITARIAN REGIMES. THEREFORE, CA IN EEMA, WHILE HAVING CERTAIN OVERALL OBJECTIVES, MUST PURSUE THESE GOALS IN VERY DIFFERENT WAYS FOR THE VARIOUS MARKETS. IT IS NECESSARY TO DEVISE AND IMPLEMENT STRATEGIES THAT ARE HIGHLY MARKET SPECIFIC.
Page 2: vae42e00
2 FOR EXAMPLE, IN SWEDEN, THE CONCEPT OF LOBBYING, ALTHOUGH PERFECTLY LEGAL, IS MISUNDERSTOOD AND HAS, CONSEQUENTLY, QUITE NEGATIVE CONNOTATIONS. WHILE ! IN SAUDI ARABIA, THERE IS NO CONVENTIONAL POLITICAL/PARLIAMENTARY STRUCTURE TO LOBBY. SOMEONE HAS POINTED OUT THAT GOVERNMENT RELATIONS ~ WERE DEVELOPED FOR DEMOCRACIES. WELL, IN EEMA, WEI HAVE MANY COUNTRIES WHICH ARE NOT DEMOCRATIC BUT WE ARE RE-INVENTING GOVERNMENT RELATIONS WITH SOME NOTABLE SUCCESSES WHICH I WILL DISCUSS LATER. THE SAME DIVERSITY APPLIES TO CONMUNICATIONS AND i THE MEDIA. IN THE WHOLE OF EASTERN EUROPE, A FREE, PRESS IS STILL A NEW PHENOMENON. WE ARE DEVELOPING SYSTEMS WHICH CAN RESPOND TO THESE CHANGES AND IN SOME CASES ASSIST THE VERY PROCESS OF EVOLUTION. f MANY OF THE THINGS WE DO IN EEMA ARE BEING DONE FOR THE FIRST TIME - FROM ISSUING PRESS RELEASES IN BULGARIA OR THE USSR TO HIRING THE FIRST PR AGENCY, IN POLAND. GIVEN THE SIZE OF EEMA AND THE HUGE RANGE OF ISSUES, IT IS INEVITABLE THAT THE HQ TEAM HAS HAD i TO DEVELOP AN ABILITY TO FUNCTION AS A FIREFIGHTING TEAM RUSHING TO DEAL WITH A HWL CRISIS IN SWEDEN ONE DAY, WHICH MAY BE OVERTAKEN BY THE URGENCY OF AN AD BAN THREAT IN MORROCO THE NEXT. OUR MAIN STRATEGY MUST BE TO HAVE, OR GET WELL TRAINED
Page 3: vae42e00
CA STAFF IN OUR MARKETS AND TO MAINTAIN A MANAGEABLE CA HQ TEAM. L.ET-S TURN NOW TO OUR OBJECTIVES. (2) WE HAVE FIVE OVERALL CORPORATE AFFAIRS OBJECTIVES.' FIRSTLY, WE MUST PREVENT THE ADOPTION OF LEGISLATION DETRIMENTAL TO OUR CONSUMERS~ RIGHTS, WHILST TRYING TO MAINTAIN SMOKING AS AN AFFORDABLEi PLEASURE. SECONDLY, OUR STAFF WILL COUNTER-ATTACK ALL ATTEMPTS TO FURTHER LIMIT OUR ABILITY AND FREEDOM TO DEVELOP, PRODUCE AND MARKET THE COMPANYI S BRANDS. THIRDLY, ONE OF OUR MAIN GOALS IS TO STOP THE DECLINE IN SMOKINGSf SOCIAL ACCEPTABILITY AND TO DEFEND OUR CONSUMERSf PUBLIC IMAGE BY PROMOTING THEIR RIGHTS. FOURTHLY, OUR CA STAFF IS CURRENTLY ENHANCING PM'Sl CORPORATE IMAGE AND BY DOING SO WE ARE STRIVING T0 ESTABLISH THE BASIS FOR A POSITIVE BUSINESS ENVIRONMENT FOR OUR REGIONAL MANAGEMENTf S OBJECTIVES. FINALLY, ONE OF OUR KEY TASKS IS TO SYSTEMATICALLY~ COMMUNICATE SOUND INFORMATION ABOUT OUR
Page 4: vae42e00
4 CORPORATION, ITS PRODUCTS, POLICIES AND SPONSORSHIP ~ ENDEAVOURS TO INTERNAL STAFF AND THEIR FAMILIES. (3) IN ORDER TO ACHIEVE THESE AMBITIOUS GOALS, WE NEED: COHERENT AND WORKABLE STRATEGIES. ONE OF THE FIRST ONES IS TO DEVELOP AND CONMUNICATE CORPORATE ; MESSAGES WHICH ARE POLITICALLY RELEVANT AND PERSUASIVE TO OUR KEY TARGETS. IN DOING SO, WE ARE BUILDING A SYSTEMATIC AND COMPREHENSIVE DIALOGUE WITH IMPORTANT DECISION MAKERS REGION WIDE. THE SAME STRATEGY WILL ALLOW US TO FURTHER BUILD AND STRENGTHEN OUR ALLIESf NETWORKS OVER THE REGION AND TO ERECT INDUSTRY WORKING GROUPS WHICH ARE MORE ~ SOLID AND BETTER EQUIPPED WITH EFFICIENT STAFF. IN THE FRAMEWORK, CA WILL ALSO FURTHER DEVELOP ITS MEDIA COMMUNICATIONS AS WELL AS ITS GOVERNMENT ; RELATIONS PROGRAMS. THE TWO SHOULD SERVE BOTH THE f HQ AND THE VARIOUS MARKETS' NEEDS, CONTINUITY AND FREQUENCY ARE OUR KEY TACTICAL DEMANDS. BY EXTENSION, WE WILL NATURALLY CONTINUE TO TRAIN INTERNAL SPOKERSPERSONS TO GO PUBLIC WITH AN INCREASED FREQUENCY WITH THE TASK OF DEFENDING OUR VIEWPOINT WHENEVER POSSIBLE. CA WILL ALSO PURSUE IN ITS TRADITION OF SPONSORING MEANINGFUL SOCIAL AND ; CULTURAL EVENTS AND PROGRAMS. FINALLY ONE OF OUR TASKS IS TO MOVE OUR COMMUNICATIONS TOWARDS DISCUSSING CREDIBLE AND
Page 5: vae42e00
5 PRACTICAL SOLUTIONS TO HELP SOLVE PROBLEMS ARISING~l BETWEEN SMOKERS AND NON-SMOKERS. CA IS NO LONGER A STATISTICS GAME OR A SCIENTIFIC DEBATE, IT IS A ; QUESTION OF BEING PRACTICAL, AND POLITICALLY ACCEPTABLE. (4) THE CORPORATE AFFAIRS FUNCTION IN THE EEMA REGION IS SERVICED FROM A CA HEADQUARTERS FUNCTION, WHICH IS DIVIDED INTO 3 BASIC SECTIONS, THAT IS, A GOVERNMENT RELATIONS UNIT, FOR DIRECT CONMUNICATIONS TASKS, A MEDIA RELATIONS UNIT, LOGICALLY DEALING WITH CONMUNICATIONS TO AND VIA ; MEDIA AND A PROJECT UNIT, IN WHICH WE WILL HAVE AN; ETS AND ENVIRONMENTAL EXPERT, AND WHERE WE ARE ALSO WORKING WITH MONITORING, REPORTING AND I DOCUMENTATION TASKS, AS WELL AS CONTRIBUTIONS AND SPONSORSHIP TOOLS. IT SHOULD BE NOTED THAT WE HAVE, SINCE SPRING 1991, ALSO ADDED A CONMON MARKET EXPERT TO OUR TEAM, OPERATING OUT OF BRUSSELS WITH A MAIN TASK OF MONITORING AND INFLUENCING NEGOTIATIONS BETWEEN EEC AND EEMA MARKETS, NOT LEAST THE E F T A AREA. WE DO NOT BELIEVE IN ADDING MORE FUNCTIONS TO THE CENTRAL CA UNIT. INSTEAD, WE FOCUS ON A CLOSE ' COOPERATION WITH EXPERTS FROM VARIOUS SOURCES, LIKE PLANNING, FINANCE, LEGAL, PMI IN RYE BROOK, OUTSIDE CA AGENCIES, SCIENCE AND TECHNOLOGY.
Page 6: vae42e00
6 LET ME ALSO ADD, THAT WE BELIEVE THAT ALL MAJOR ~ MARKETS SHOULD HAVE THEIR OWN IN-MARKET CA FUNCTIONS. WE PREFER BUILDING AND TRAINING ~ IN-MARKET CA EXPERTISE RATHER THAN EXPANDING THE CENTRAL EEMA HQ CA FUNCTION. IN ALL NEW CA MARKETS WE AIM AT STARTING FROM HIRING GOOD GOVERNMENT RELATIONS PEOPLE, WHICH TAKE LONGER TO TRAIN AND TO GET UP TO SPEED, THEN ADDING TO THE MEDIA RELATIONS CAPABILITIES. (5) TO ACHIEVE OUR GOALS PER MARKET, HERE ARE THE HUMAN RESOURCES WE CAN RELY UPON IN-MARKET : IN AFRICA, CA BASICALLY OPERATES THROUGH A WEST-AFRICAN WORKING GROUP. MY AMBITION IS TO A PAN-AFRICAN, SUB-SAHARAN INDUSTRY WORKING GROUP. THERE IS NO PERMANENT CA STAFF ON SITE. IN EASTERN/CENTRAL EUROPE, WE PLAN TO HAVE CA STAFF IN HUNGARY AND YUGOSLAVIA THIS YEAR AND IN POLAND IN 1992. A CA AGENCY IS AVAILABLE ALREADY IN POLAND, AND OTHERS WILL BE SHORTLY IN OUR DISPOSAL IN CZEKOSLOVAKIA, YUGOSLAVIA AND HUNGARY. AN EASTERN EUROPE INDUSTRY WORKING GROUP IS BEING SET UP. IN THE GCC, THERE IS A CA MANAGER AND A GR EXECUTIVE BEING HIRED, AIDED BY A REGION-WIDE CA AGENCY BASED IN DUBAI. A MIDDLE EAST WORKING GROUP
Page 7: vae42e00
7 EXISTS. CA IS ALSO ASSISTED BY CONSULTANTS IN SAUDI ARABIA, BAHRAIN AND QATAR. i IN THE NORDIC AREA, WE HAVE A CA MANAGER, MEDIA AND GR EXPERTS, ASSISTED BY A GR EXPERT; A MEDIA EXPERT PLUS A GR PROFESSIONAL AND A CA MANAGER IN HELSINKI, PLUS A CA MANAGER IN OSLO. AND WE HAVE PR AGENCIES IN ALL THESE COUNTRIES, AS WELL AS DENMARK. IN TURKEY, WE HAVE A CA MANAGER AND GR EXPERT, IN INSTANBUL, ASSISTED BY A GR AGENCY IN ANKARA. AN INDUSTRY GROUP IS AT WORK IN THE TURKISH MARKET. ~ ; FINALLY, SWITZERLAND IS WELL STAFFED WITH A CA DIRECTOR, A GR EXPERT AND MEDIA EXPERTS, WITH AN i NMA WHICH, THOUGH SLOW, HAS EXCELLENT AND FREQUENT; ~ POLITICAL CONTACTS. (6) OUR OPERATIONS ARE DIVIDED INTO 7 CATEGORIES, TAXATION, MARKETING FREEDOMS, PRODUCT REGULATIO S AND RESTRICTIONS, ETS ISSUES AND ETS-RELATED SMOKING AND SMOKERS' DISCRIMINATION, THE SOCIAL ACCEPTABILITY OF SMOKING AND SMOKERS, PRIMARY ISSUES ASPECTS, AND, ESPECIALLY FOR EUROPE ALSO THE DEFENCE OF DUTY FREE. IN COOPERATION WITH LINE MANAGEMENT WE HAVE ANALYSED EACH EEMA MARKET PER EVERY ONE OF THESE
Page 8: vae42e00
8 SEVEN CATEGORIES. THE PROJECTS GIVEN TO CA ARE CATEGORISED "A", "B" OR "C" PRIORITIES ACCORDING ~ TO THE LIKELIHOOD OF SUCCESS, THE URGENCY, AND ABOVE ALL THE MAGNITUDE OF POTENTIAL SUCCESS AND f FAILURE. ALL TOGETHER OUR PRIORITY LISTS (OF WHICH THIS OVERHEAD IS JUST ONE ILLUSTRATION) COVERS NO LESS THAN 155 PROJECTS. OF THESE 155 PROJECTS 66 ARE GRADED "A" PRIORITIES. IN SEPTEMBER 1990 WE HAD CA PROJECTS IN 13 EEMA MARKETS, TODAY WE ARE ACTIVE IN 22 MARKETS. TODAY, I WILL ONLY COVER A FAIRLY SMALL NUMBER OF PROJECTS AND TASKS; AND IN A BULLET POINT FORM. BEFORE I START COVERING THE SPECIFIC PROJECTS AH OF US, PLEASE ALLOW ME TO SHOW YOU 4 MINUTES OF VIDEO MATERIAL, GIVING YOU A STARTING POINT REGARDING THE PROJECTS, AND ACHIEVEMENTS THAT HAVE` OCCUPIED US THIS SEASON. (VIDEO) (7) FIRST, TAXATION. Two CRITICAL ISSUES ARE AT STAKE HERE : ELIMINATING THE AD VALOREM TAX SYSTEM IN THE GCC AND SUCCESSFULLY SOLVING A CRITICAL FISCAL ISSUE IN EASTERN EUROPE. SECONDLY, MARKETING RESTRICTIONS. WE ARE LOOKING AT THE AD BANS THREATS IN 3 OF OUR MARKETS : SWITZERLAND, TURKEY AND POLAND. r1a c.n 0 a ~ ~ 0 ch ~ 0
Page 9: vae42e00
9 THIRDLY, UNDER PRODUCT RESTRICTIONS, WE WILL DISCUSS MAXIMUM CONSTITUENT LEVELS IN THE GCC AND I THE THREAT OF NEW HEALTH WARNING LABELS IN SWEDEN.; FOURTHLY, WE COVER SOME KEY ETS AND SMOKERS DISCRIMINATION ISSUES. THEN, WE HAVE SMOKING AND THE TOBACCO INDUSTRY'S ACCEPTABILITY WITH THE GOVERNMENT AND MEDIA RELATIONS PROGRAMS SUPPORTED BY SPONSORSHIP PROJECTS. WE HAVE CHOSEN TO COVER OUR RECOMNENDATIONS FOR A SECOND WORLD SMOKEPEACE DAY CONCEPT UNDER THAT CATEGORY. HAVING SAID THAT, HERE ARE THE MAIN ISSUES AND PRIORITIES OF EEMA'S PRESENTATION TODAY. (8) GCC TAXATION. THE ISSUE IN THE GCC IS TO CHANGE THE EXISTING AD VALOREM TAX STRUCTURE INTO A SPECIFIC ONE. IN ADDITION, PM IS FIGHTING THE THREAT OF AN INCREASEh IN THE LEVEL OF CUSTOM DUTIES LEVIED ON CIGARETTES: OUR STRATEGY HAS BEEN TO ESTABLISH, AND NOW CAPITALISE ON THE GCC HEALTH MINISTERS' COUNCIL~S SUPPORT OF THE SPECIFIC DUTY SYSTEM AND TO OBTAIN A SIMILAR ENDORSEMENT FROM FINANCE AND CUSTOMS OFFICIALS IN EACH MEMBER STATE OF THE GCC. THIS
Page 10: vae42e00
- 10 - STRATEGY IS CONDUCTED BY OUR CA STAFF IN CLOSE CO-OPERATION WITH OUR IN-MARKET CONSULTANTS. OUR POLICY IS ALSO TO OBTAIN THE ASSISTANCE OF THE USTR IN PRESENTING OUR CASE AS A US TRADE ISSUE. WE ~ HAVE STARTED TO WORK WITH US DIPLOMATIC MISSIONS TO GCC COUNTRIES TO PRESENT ARGUMENTS URGING A RAPID TRANSITION TO SPECIFIC DUTY STRUCTURE. AT THE SAME TIME, WE HAVE CONSIDERED PROPOSING ' SEMI-REGULAR INDEXATION ADJUSTMENTS OF THE SPECIFIC STRUCTURE AS A FALL-BACK POSITION. (9) IN TERMS OF ACTION, THE MIDDLE EAST DESK DIRECTOR OF THE USTR WAS BRIEFED ON MAY 15TH, WITH WRITTEN ARGUMENTS MADE AVAILABLE SUBSEQUENTLY. WE ARE FOLLOWING UP IN JUNE WITH REGULAR CONTACTS AT THE US MISSIONS IN THE GCC TO ENSURE THEY HAVE BEEN INSTRUCTED BY WASHINGTON TO ASSIST PM IN THE MATTER. WE SHALL ALSO MAKE SURE THAT THE GCC HEALTH MINISTERS' COUNCIL AGAIN ENDORSES THE FULLY SPECIFIC DUTY STRUCTURE, AS OPPOSED TO SAUDI TYPE MINIMUM SPECIFIC DUTY. THIS STEP MUST BE TAKEN BEFORE THE NEXT COUNCIL CONFERENCE IN DECEMBER 1991. OUR IN-MARKET TEAMS, ASSISTED BY LOCAL CONSULTANTS, WILL MAINTAIN CONTACTS IN BAHRAIN, QATAR AND OMAN

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