Tobacco Documents Online

GHAID'S0iURNS 8t PAR1tE Zto R0oRtRCCL9R Risr' XT4:0- " 11Qver~isinp '88 00352.SZ2 Ktw Ybptx., N,'r'. ooiir : arei 4..-.ae JN:1"" NMIf , -. •r +[i,i. Nrra[ . R6[[IM4t. 1Ntr 0..6"s W&Mf7 MyI7 CiMU[N, (212:)-40&-5221 April 26, 1988 The Ronora'ble Thomas x, . 3.uken Chaf rsDac 6tibconomittee. om Tramsportsitimn',~ Tourism and, Har4r~d'o~us~~ Materials ~ Cornmittee on EMerqy and' Commerce U.S. House of Representatives Washicvton, D.C« 2051'S Dear Conq,ressMam Lukenr' .IW .e.Y... a \. wMIrtftk ... [.. [.I2CI[ s.ll. MtH[O«. 1..0'. : ~... .+...+ .v.++.. .... .w r 1.M..r..r.. ...1•C.rr Nt/t. r... .a.M... wN Wt W'*ra. :rvi.v[ K[.6*ltCw-C" .1.a.CaCMf OCaKI l*., 0"[LO.1hr['.. ,.~.«..., We have received your request aated April 14, 198,81 for documents relatin0 to The American Tobacco Company's advertisi'q acd marketing of C~LTt~t~ ci~Qarettes. I~eihave: reviewed ~he same with representatives of American Tobacco and respectfully submit the iol]ow'inpi.Mith respect tolth'e request for docu'mentation suppoxtYno or contradictinq the statement that •rach, (warfety of CARLTQP ciqar.tte) coiapeteLsl, in a distinct proQvct 'h'iche,,'• we point -out that th.se "niches" are created over time by the market. As you may know,, at one time the majority of cigarettes soldin the United States were non-filter, requlsrs (70,'1s). Tbday,, the ~aost popular ciqarettek are filter, ]~!'~ape (~S''s). There aze also 1o0'1a, and 120'0 menthol aAd no'n-m+eathol ; soft-pack and boz and •sY!ima'1. ;As we said' ia vur tatement, ourrent]y, American Tobacco mprkets nine varieties of CARLTON cigarettes. We are enciosin4 a sample packaqe o!' each variety of CARL3'om cigarettes, ir~ order to illustrate the aistiactiveoess of

The Honorsbie Thomas A. Luken -2'- April 26, 1988 escri vari~ty. P'leasa also note tmat the tar and nicotine content is displayed on each paoka2e for the benefit of intareste4 consumers. IMamy studies of the ciqarette market aAalTse market share and;other data based on product •niches•. At an iliustration of this point, ws sre enclosing the following cigarette market reports: 1).Hezaell 8teports entitled "6al~ea Eoticaates for thwCiearette induatry' fortha years 19833 through 2987; 2) Mami9ement Science Associates, Inc. f•M6A") Volume Estilmatiom. Model reports .foz American Tobacco for the years 198tthrouQh 1987s 3) •Report to the American Tobacco Company oq Cigarettes throuqh January 1, 19'88• by the A.C. Nielsen Cbmpanyrl 4) The !'ederal Trade Commissi'on's Report to Congress Pu~rsuant to the Federal Cigarette Labelin and Advertising Act, 1985, d'ated !'~.bruary, 1988; end 5) The !'ed'eral Ttade CommnissioniReports on •Tlsr•, Nic!otine and Carbon. Mb:toside of the Smoke of 207 v8riet#es of Domestic Cigarettes, dated January, 1985'. All of these reports break down the ci'Qarette market into, various brands with their multiple types, styles or "Aiclhss'. The M6A and'mielasn Reports aze confidential ar:d' proprietary and should be treated a6co.rdinqly. !The secon4 r:queat asks,8or documentation,of our statement.,triat certain advertisements are directed towar6 smokers ot one of the many types of ci2arettes. The, adver- tisaments themselves are the best docuraenitstion of thia fact.. An advertisement featuri,nq,~ for ezamp,le, a menthol ciqarette$is obviouely directed to emokars of snemthol' ciqarette . 1~ee submit that a re~riew of a samplinpiof' American ~obecco"s CARLTON advertisements for the years 1983 through 1988 :naketclaar to Mhom the advertisements are directed. Samples of'CARLTOW advertisements are: submitted'.:in response to the fifth reQuest. ~IIThe third request asks for documents relating to consumer (botri smokers" and non-smokers') reaction ae:d perceptioli, of advertisements of cigarettes with iess, thsn 15 mg. of tat. Nhi'le we question l:ow, onon-smokers are consumers by definition, Me note that Americaa Tobacco does aot direct its advertisements to non-smokers. American Tobacco''s msrketinq;'reseerrcb is condticted' on a lli:aited basis and the Company h,s not done any research re ardiapithe perception as~d react~ons of consumers to advert~semerits of ciqarettes. with less"than 15 mq. of tar., -The €ourth,request asks for the percentage off cigarette te'vrhtaet derived from each of the nine varieties of CARLTCN and' the percentage of advertising expenditures spent on, each CARLTON variety. These figures are available, but

F The Hbnorab3a.Thomas A,, Luken -3- Apr~i1 26, 19~~881 ~ are considered by Amarican Tobacco to be highly confidential and proprietary,.. Public misclosura.of such information would have an adverse competitive effect on American Tobacco's business. Accordinqtyn, we respectfully decline to provide this information at this time. We note that similar ini©rmation is provided annually to, the Federal Trade Cosamission on aconfidentllal basis in response to orders issu.d pursuant to 6(b) of the FTC Act (15: USC S~'i) ~rhich, enabler,'t~ie Cbmaniss~on to prepare its annual reportt to Congress as r.quiredbyBection 9(b), ofTrie, Federal Qi~qaratt.Labeli'nq Nnd Advertising Act, 15 D'.S.C. f1331 &k ~. ~2n resaponsa, ta the fifth request, we are enclosinQi the sampSinq of CARLTpN advertisinq and point-of-sale material 4ef.rr.d to above. ~ , j8'~inally, we wou]~d lika to reiterate our position,, asrefle~ctedin thestatemeot enc3osed, with~ str., Mullem"s letter of:April 11th, 1988 that American Tobacco's cigarette advertising fully complies with F.T.C. requirements and is not deceptive in any respect.: Very truly yours,. Daniel J. O'Nei'~ll! Znclosure#' iY' }M DJO "N/bes,. ~ I r i~