Tobacco Documents Online

THE TOBACCO ITL'TE _- ; lP i ii\\' ti; SAMI'1`.1. U. ( HILCO'1'F. IK. Il!\. U. _Uiqq! PI-ident _'U- -1:~---i` .~ltnfl.i .!_4 , Iri-1, December 21, 1982 M E M 0 R A N D U M ~ - - - - - - ~ - - - TO: Messrs. Curtis H. Judge Arthur J. Stevens, Esq. James C. Bowling Hugh Cullman K.v.R. Dey, Jr. Edward A. Horrigan, Jr. I.W. Hughes Ernest Pepples, Esq. Robert B. Seidensticker Charles A. Tucker Barry J. Nova W. Brooks George FROM: Samuel D. Chilcote, Jr. Following our recent annual meeting in New York, several members of the Executive Committee expressed an interest in obtaining copies of the presentations made by Horace and myself. Enclosed here are transcripts of those speeches along with some of the graphics presented at the time. We hope you find this material useful. SDC:mw

'COMMENTS OF SAMUEL D. CHILCOTE, JR. EXECUTIVE COMMITTEE DECEMBER 9, 1982

PAGE 1 THANK YOU, ED. BEFORE I BEGIN MY REMARKS I DO WANT TO THANK YOU FOR THE EXCELLENT JOB YOU'VE DONE THESE PAST TWO YEARS. I HAVE ENJOYED YOUR LEADERSHIP PERSONALLY AND PROFESSIONALLY. AND TO CURT... CONGRATULATIONS ON YOUR ELECTION AS CHAIRMAN OF THE EXECUTIVE COMMITTEE. THESE NEXT TWO YEARS WILL BE AMONG THE MOST DIFFICULT FOR THIS INDUSTRY. BUT, I LOOK FORWARD TO MEETING THOSE CHALLENGES WITH YOU IN THE DRIVER'S SEAT. GENTLEMEN... I LIKE ANNUAL MEETINGS. THEY PROVIDE THE OPPORTUNITY TO TAKE A STEP BACK AND LOOK AT ALL THE TREES IN THE FOREST. ED, I AM SURE WILL HAVE COMMENTS OF THESE PAST TWO YEARS. CURT OUTLINED OUR HOPES FOR THE FUTURE. IN LINE WITH OUR MANAGEMENT OF THE ISSUES, I WOULD LIKE TO TAKE A SOMEWHAT BROAD LOOK AT THE FORTUNES OF -THIS INDUSTRY OVER THE PAST TEN YEARS... AND THEN I WOULD LIKE TO FOCUS ON JUST A FEW IMMEDIATE CHALLENGES. I AM TAKING THIS APPROACH BECAUSE I BELIEVE THAT OUR HISTORY... THESE PAST TEN YEARS... TELLS US THAT WE ARE NOW IN A PERIOD WHICH REQUIRES IMMEDIATE ACTION. FIRST... LET ME DISCUSS SOME TRENDS AND HOW THEY RELATE TO OUR NEEDS. IN THE SIMPLEST OF TERMS... YOU, AS BUSINESSMEN, WANT TO BE FREE TO SERVE OUR CUSTOMERS IN A RESPONSIBLE WAY... AND TO EARN A REASONABLE RETURN FOR YOUR INVESTORS ANS OURSELVES. BUT, LET US LOOK AT SOME OTHER MEASUREMENTS OF OUR PLACE IN THE PUBLIC AFFAIRS ENVIRONMENT. I HAVE SAID IN THE PAST... WE WANT PEOPLE TO BELIEVE... OR AT LEAST CONSIDER WHAT WE SAY.

P aGE 2 OUR CREDIBILITY AS A SOURCE OF INFORMATION ON SMOKING AND HEALTH IS SO LOW IT IS ALMOST UNMEASURABLE AND HAS BEEN FOR ALL OF THESE PAST TEN YEARS. THE AMERICAN CANCER SOCIETY AND ITS SISTER ORGANIZATIONS... THE FOLKS WE CALL ANTI-SMOKERS... ENJOY HIGH LEVELS OF CREDIBILITY. IN FACT, THIS YEAR, THEY ARE AT THE HIGHEST LEVEL WE HAVE EVER RECORDED. (Figure 1) QUITE IN LINE WITH THAT DIFFERENCE IN CREDIBILITY... AND WITH THE INCREASE IN ANTI-SMOKER ACTIVITY... THE PUBLIC'S OVERALL VIEW OF THE WAY WE HAVE HANDLED THE SMOKING AND HEALTH CONTROVERSY IS NEGATIVE AND INCREASINGLY SO. MORE PEOPLE SAY THEY KNOW ENOUGH ABOUT SMOKING AND HEALTH. I AND... AS THIS CHART SHOWS... FEWER PEOPLE WANT TO KNOW MORE. (Figure 2) BUT... AREN'T AMERICANS AN OPEN MINDED PEOPLE... WILLING TO CONSIDER REASONABLE ARGUMENTS... AND QUICK TO REJECT EXTREMISM? GENTLEMEN... I HOPE THAT IS TRUE. OUR NATIONAL ADVERTISING WITH ITS MODERATE TONE IS BASED ON THE PREMISE THAT PEOPLE WILL OPEN THEIR MINDS AND LISTEN. I AM NOT ENCOURAGED BY THE TRENDS OF THE PAST TEN YEARS. BUT I AM ENCOURAGED BY THE INITIAL RESULTS OF OUR ADVERTISING. BUT... YOU MIGHT ARGUE... ATTITUDES ARE JUST ONE FACTOR IN PUBLIC RESPONSE. A LOT MORE GOES INTO THE EQUATION. LET'S LOOK AT THE COMBINATION OF LEGISLATION AND ATTITUDES. GENTLEMEN... THE BLUE BLOCKS IN THE BACKGROUND REPRESENT THE NUMBER OF PUBLIC SMOKING BILLS INTRODUCED IN EACH OF THE PAST TEN YEARS. (Figure 3) THERE ARE SEVERAL THINGS THAT ARE INTERESTING HERE...

PAGE 3 FIRST, WHEN THE MAJORITY OF PUBLIC SMOKING BILLS WERE FIRST INTRODUCED... THE PUBLIC CLEARLY WAS NOT BEHIND THEM. THEN... WHEN PUBLIC CONCERN OVER AMBIENT SMOICE DID BEGIN TO BUILD THE NUMBER OF BILLS DROPPED OFF. THIS INCREASE IN PUBLIC CONCERN IF IT IS SEEN BY THE ANTI-SMOKER... COULD ADD FUEL TO THE FIRE IN COMING LEGISLATIVE SESSIONS. IT IS A DANGEROUS SITUATION. BUT, THE NUMBER OF BILLS INTRODUCED IS LIKE WHEAT PRODUCTION STATISTICS FROM RUSSIA. THEY REQUIRE A CLOSER LOOK. THE IMPORTANT QUESTION IS HOW HAVE WE DONE? WELL... LET US LOOK FOR THE MOMENT AT JUST THE PUBLIC SMOKING ISSUE. SINCE 1972, WE'VE FACED 1,079 PUBLIC SMOKING BILLS AND HAVE DEFEATED MORE THAN 93 PERCENT OF THEM ALMOST ENTIRELY OUTSIDE OF THE TOBACCO REGION. (Figure u) WE DEFEATED THOSE BILLS DESPITE A HAIL STORM OF CRITICISM AGAINST TOBACCO. SOME OF THE BILLS WERE DERAILED BEFORE THEY EVER REACHED COMMITTEES... SOME WERE KILLED IN COMMITTEE... SOME WERE DEFEATED ON THE FLOORS OF LEGISLATURES. BUT, YOU WILL LOOK LONG AND HARD BEFORE YOU FIND A HIGHER BATTING AVERAGE THAN OURS. THIS PAST YEAR, JUST THREE, RELATIVELY MINOR BILLS PASSED OF THE 85 WHICH WERE INTRODUCED. I CAN ASSURE YOU... THERE ARE VERY FEW PEOPLE IN STATE LEGISLATURES SPEAKING OUT ON BEHALF OF TOBACCO. IF IT WERE NOT FOR OUR FIELD STAFF... OUR LOBBYISTS AND THE TAN ORGANIZATION THERE WOULD BE ALMOST NO ONE.

PAGE 4 THE SAME CAN BE SAID FOR THE TOBACCO TAX COUNCIL'S EFFORTS OVER THE YEARS. THEIR WON-LOSS RECORD WAS 482 TAX PROPOSALS INTRODUCED AND JUST 42 ADOPTED SINCE-1972. (Figure 5) AND... WHERE THE TAX COUNCIL HAD TO DEAL WITH THE SAME ANTI-TOBACCO RHETORIC WHICH WE FACED... THEY ALSO HAD TO CONTEND WITH THE DETERIORATING FINANCIAL POSITION OF SO MANY STATES. I DO NOT BELIEVE WE CAN BE TOO STRONG... THE CHALLENGES AHEAD ARE EQUAL TO ALL THAT WE HAVE OVERCOME. OUR LOSS... THIS PAST SUMMER... ON THE FEDERAL CIGARETTE EXCISE TAX PROPOSAL WAS AN INDICATION THAT WE CAN LOSE THE BIG BATTLES. OUR IMAGE AS AN UNBEATABLE LOBBY HAS BEEN PUNCTURED... DESPITE THE FACT THAT WE USED ALL OF OUR LOBBYING RESOURCES MORE COMPREHENSIVELY THAN EVER BEFORE. I DO NOT THINK WE SHOULD BE DISCOURAGED BY THAT LOSS... BUT I THINK WE SHOULD BE MINDFUL TO MAINTAIN OUR STRENGTH... WE CAN NOT AFFORD TO APPEAR WEAKENED OR READY FOR CONCESSION. THERE IS A THIRD AREA... BEYOND PUBLIC ATTITUDES AND LEGISLATION... THAT I WOULD LIKE TO DISCUSS. THE CONSUMING PUBLIC... SMOKERS. THIS YEAR... JUST 32 PERCENT OF THE PEOPLE SURVEYED SAID THEY WERE SMOKERS. PERHAPS THAT NUMBER IS SUSPECT... PERHAPS PEOPLE WHO SMOKE AREN'T ADMITTING IT. THAT IS QUIT_" POSSIBLE. BUT... GENTLEMEN... THE NUMBERS ARE LESS T:i;;°1 ENCOURAGING. WHAT I HAVE DONE HERE IS TO ESTABLISH 1972 AS A BASE YEAR AND I HAVE CREATED TWO INDICES... ONE SHOWING ANNUAL PER CAPITAL CONSUMPTION OF PACKS... THE OTHER SHOWS THE PERCLNTAGE OF PEOPLE WHO SAID THEY WERE SMOKERS. (Figure 6)

PAGE 5 I BRING THIS CHART TO YOUR ATTENTION FOR TWO REASONS... 1. IT ROUNDS OUT THE PICTURE... PUBLIC CONFIDENCE... LEGISLATION... AND CONSUMPTION... AND 2. IT SHOWS SOMETHING THAT OUR OTHER CHARTS DEMONSTRATE AS WELL. IT SHOWS THAT THERE WAS INDEED A TURNING POINT... A WATERSHED... ABOUT 1975. YOU SEE IT ON THIS SLIDE... AND IF WE CAN GO BACK... YOU WILL SEE IT ON THESE AS WELL. WHAT OCCURRED IN 1975 THAT COULD POSSIBLY HAVE HAD THAT MUCH IMPACT? IT WASN'T SO MUCH A SINGLE EVENT... BUT AN IMPORTANT SHIFT IN TACTICS THAT CREATED THE CHANGE. UP TO THAT POINT, THE ANTI-SMOKERS CONCENTRATED ON WHAT WE CALL THE "PRIMARY ISSUE"... THE EFFECTS OF SMOKING ON THE SMOKER. AND... OVER TIME... MOST PEOPLE DECIDED THEY WERE RIGHT. THEN IN 1975, THE ANTI-SMOKERS REALIZED THERE WAS VERY LITTLE MORE THEY COULD DO WITH THE PRIMARY ISSUE. THEY CONSIDERED THEIR ALTERNATIVES... AND DECIDED TO FOCUS ON SO-CALLED "INNOCENT BYSTANDERS." THEY INTRODUCED... AND BEGAN PROMOTING THE CONCEPT THAT CIGARETTE SMOKE IS DANGEROUS TO NONSMOKERS, THAT CIGARETTE ADVERTISING IS AIMED AT CHILDREN... TO CREATE FUTURE CUSTOMERS WHEN THEY ARE AT THEIR MOST IMPRESSIONABLE STAGE. AND LATER ON THEY INTRODUCED THE CONCEPT OF THE SOCIAL COSTS OF SMOKING AND THEY TRIED... PERHAPS SUCCESSFULLY...TO OFFSET THE ARGUMENT THAT TOBACCO MAKES A POSITIVE CONTRIBUTOR TO THE ECONOMY.

PAGE 6 WITH THE "INNOCENT BYSTANDER" THEME IMPLANTED IN AMERICANS MINDS... IT WAS RELATIVELY EASY FOR ANTI-SMOKERS TO THEN EXPLOIT THE•ACCIDENTAL FIRE ISSUE. WHERE "SELF-EXTINGUISHING" LEGISLATION IS BEING PROPOSED, YOU WILL FIND MORE ANTI-SMOKERS THAN FIREFIGHTERS... I ASSURE YOU OF THAT. CLEARLY, IT WAS THIS SHIFT IN STRATEGIES THAT CREATED THE PUSH FOR PUBLIC SMOKING RESTRICTIONS... AND THE GRADUAL DETERIORATION OF PUBLIC ATTITUDES TOWARD SMOKING AS A SOCIAL CUSTOM. IN 1979... THE FOURTH WORLD CONFERENCE FORMALIZED THE NEW ANTI-SMOKER DIRECTION AND SET FORTH FOUR OBJECTIVES. THEY READ LIKE THE MIRROR-IMAGE OF OUR OWN OBJECTIVES. THEIR PLAN IS THE VERY MODEL.OF WHAT JOHN BANZHAF CALLS "GUERILLA LAW." I HAVE SPOKEN ABOUT THE TRENDS OF THESE PAST TEN YEARS... BUT, WHAT DO WE FACE RIGHT NOW? I THINK WE ARE FACED WITH SEVERAL ISSUES WHICH COULD MAKE A VERY LARGE DIFFERENCE IN THE WAY WE DO BUSINESS IN COMING YEARS. LET ME SPEND A FEW MINUTES ON EACH OF THEM... THE PUBLIC SMOKING ISSUE... THE NUMBER OF BILLS ARE DOWN BUT WE CONTINUE TO SEE THEM IN KEY LEGISLATURES... "PUBLIC SMOKING" IS PERHAPS THE LARGEST COMPONENT OF THE OVERALL PROBLEM OF SOCIAL ACCEPTABILITY... WE DARE NOT LOSE THESE BATTLES BECAUSE PUBLIC SMOKING LAWS... EVEN THOUGH THEY ARE INEFFECTIVE... UNDERSCORE THE NOTION THAT SMOKING IS AN ANTI-SOCIAL BEHAVIOR.

PAGE 7 NOW... THE BATTLE SEEMS TO BE SHIFTING TO THE WORKPLACE. NOT ONLY ARE WE SEEING COMPANIES CREATE NONSMOKING AREAS... WE ARE SEEING ALL MANNERS OF "QUIT SMOKING"-CLINICS... ANDVE ARE HEARING INCREASED TALK ABOUT DENYING SMOKERS EMPLOYMENT. THE ACCIDENTAL FIRE ISSUE. A FEW YEARS AGO, THE IDEA OF A SELF-EXTINGUISHING CIGARETTE WOULD HAVE BEEN RIDICULED. IN 1983 WE ARE PLANNING TO FIGHT BILLS IN ONE-FIFTH OF THE STATES. .IF WE LOSE A LARGE STATE... AND NEW YORK POSES A SERIOUS CHALLENGE THIS YEAR. THE QUESTION OF FEDERAL LEGISLATION MAY BE ACADEMIC. TAXES. THE FEDERAL INCREASE WAS TOUGH TO ACCEPT... BUT THE STATE AND LOCAL TAXES WE WILL NOW HAVE TO OPPOSE WILL BE EXTREMELY , DIFFICULT TO AVOID. WE NOW EXPECT TO SEE TAX PROPOSALS IN 35 STATES THIS NEXT YEAR. AND WITH THE DEFICITS THAT STATES ARE PROJECTING, EVEN OUR FRIENDLIEST LEGISLATORS MAY HAVE LITTLE CHOICE. THE "PRIMARY ISSUE" -- SMOKING AND HEALTH. IN A MATTER OF MONTHS, WE WILL BE FACING TWO MORE ASSAULTS. FIRST... THE FIFTH WORLD CONFERENCE ON SMOKING AND HEALTH WILL BE HELD.... AND WILL NO DOUBT DRAW MUCH PUBLIC ATTENTION. A WEEK AGO, WE MET WITH TOBACCO INDUSTRY OFFICIALS FROM FIVE OTHER WESTERN COUNTRIES... WE ARE ACTIVELY WORKING WITH THEM TO PLAN AN EFFECTIVE INDUSTRY RESPONSE. SECOND... THE ANNUAL SURGEON GENERAL'S REPORT. THIS YEAR, WE ARE TOLD IT WILL TALK ABOUT SMOKING AND CARDIOVASCULAR DISEASE. AGAIN... WE EXPECT A WELL-COVERED PRESS CONFERENCE AND A GOOD DEAL

PAGE 8 OF BAD PRESS -- UNLESS WE FIND SOME WAY OF DIMINISHING ITS EFFECT. MORE ON THAT IN A MINUTE. THERE ARE OTHER ISSUES... BUT I BELIEVE THESE FOUR AREAS... PUBLIC SMOKING, ACCIDENTAL FIRES, TAXES AND SMOKING AND HEALTH... ARE OUR MOST IMMEDIATE CONCERNS. THE ACCIDENTAL FIRE PROBLEM... WE ARE MAKING EXCELLENT PROGRESS WITH OUR FIRE SAFETY PROGRAM. LET ME SHARE A FEW HIGHLIGHTS: THE EUROPEAN STUDY... CONDUCTED BY PHIL SCHAENMAN... IS A WEEK BEHIND SCHEDULE... IT HAS JUST BEEN RECEIVED AND WILL BE SENT TO YOU AS QUICKLY AS POSSIBLE. WE ARE NOW PUTTING TOGETHER A PROMOTIONAL PLAN AND, I AM TOLD, SEVERAL FIRE JOURNALS ARE ANXIOUS TO PUBLISH ITS RESULTS. WE HAVE A SMOKE DETECTOR PROMOTION PROPOSALS FROM THE FOUNDATION FOR FIRE SAFETY... IT IS BEING REVIEWED BY STAFF AND COUNSEL AND WILL BE FORWARDED TO YOU AS SOON AS POSSIBLE. WE HAVE SELECTED EIGHT CITIES AS ACCEPTABLE FOR FIRE SAFETY EDUCATION SUPPORT. THEY ARE DETROIT, BOSTON, CHICAGO, PORTLAND, SEATTLE, MILWAUKEE, DES MOINES AND BALTIMORE. THESE CITIES WERE CHECKED THOROUGHLY BY OUR STATE AND FEDERAL LOBBYISTS, OUR COUNSEL, OUR FIRE CONSULTANT AND BY OUR MEDIA RELATIONS PEOPLE. WE ARE ALREADY CONTACTING OFFICIALS IN THESE CITIES TO SOLICIT PROPOSALS FOR OUR FUNDING. THE COUNCIL OF VOLUNTEER FIREFIGHTERS... A NATIONAL ORGANIZATION... HAS PRIVATELY EXPRESSED ENTHUSIASM OVER OUR PROPOSED VOLUNTEER FIREFIGHTER PROGRAM. THEY HAVE SEVERAL IDEAS ON