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R.J'.R'eXnolds Tobacco Company 11~1.,. 2r i t'=~. ~~. ... - ~ ~.. . ~' _ / 0 . n~W~nI April 27, 1988 The Honorable Thomas A., Luken. Chairman Subcommittee on Transportatiom,. Tourismy and Hazardous Materi'als Committee on Energy and Commerce U.S. Hlouse of Representatives Washington,, D.C'. 2©515' Dear Congressman Luken~s We have received'.r your letter of' April 14, 1988, requesting that R.. J. Reynolds TobaccolCompany (''Reynolds•), pro- vide your Subcommittee with certain documents. Following receipt of your letter, we have reviewed'yolur dmcumen~t requests and'.con- ducted a preliminary review of the types of d'ocwnents iniour pos- session which might be responsive. We have also interviewed employees whoe are!knowledgeable about the subjects covered'in your requests. B'ased'r uponniour reviewf of documents and~our discussions with employees in, control of'those documents, we were unable too identify any documents which are responsive to the subjects of your Request lt'os. 1- 4. Obviously, over the years we have accu- mulated a substantial number of dbcuments which could conceivably fall within the extremely broad scope of these requestts, but, aw indicated above, we were unable to identify any market surveys or other documents which focus directly onithe statements ad'dressed! by those requestts .. The statements to which your Request Nos. 1- 41 are directed reflect the best judgment and opinions of this company. Reynolds is i.n the business of selling cigarettes. The knowl- edge, j'udqmen~t and opinion& of our, marketing department are based' uponlyears of accumulated expertise on what consumers want, and our statements are based upon this judgment and experience. For example, you asked for information supporting, Reynold's" assertion that 'smokers have ga-own, accustomed to the various brandd styles . . . and are very familliar with the differences ....'

The Honorable Thoma&A. Luken April 27, 1988' Page 2 Reynolds of fers six styles of' N0'W' cigarettes . Having six brand' styles results in, higher manufacturing costs andd a1so; creates additional problems with respect to shipping, inventory control, etc. If we at Reynolds did'inot feel that consumers were quite aware of brand styles, kings versus 10!0"s, menthol versus non-menthol, etc., we wouldd not be marketing six NOW'styliew. W'i'th, respect to your Request N'o,. 5, while we have con- ducted research on how smokers perceive particular advertisements& for particular brands of cigarettes, we were unable tolid'entify any documents whichifocus om how smokers generally perceive advertisements for cigarettes of less than 15 mg,, tar. With respect to Request No. 6, we would like to advise your Subcommittee that the information sought by this request is, confidential and'would'~ be of keen interest to our competi'tors. We thus cannot provide that informationn to your Subcommittee because of it&competitively sensitive nature and~our concern that it will become available to our competitArsl. Please n~ote that each year Reynolds provides to the Federal Trade Ci©mmission, subject to certain,confidentiality provisions, the advertising expenditure information sought in your Request No. 6 so that the Commission canimake its annual report to Congress as required by! Section 9'(,bi)i of the Federal Cigarette Labeling and'Advertising Act. Withirespect to your Request No,. 7, which asks for sam- ples of current NON'advertising d'uring the last year, copies of' the same are enclosed. One final observation to your Subcommittee isthat the history of tar labeling and testing is a long and!complicated one which1we suggest should be studiedicarefully by your S,ubcommit- tee. The history of tar and nicotine advertising, goes back to 1955, whp.n the Federal Trade Commissi'on first released advertising Guides that prohibited representations as to the tar and~ nicotine yield of ciqe;rettes 'when it has not been established by caunpe- tent scientific proof applicable at the time of dissemination that the claim is true, and if true, that such difference or dif- ferences are significant.• F.T.C. Release, Sept. 22', 1955, 'rrepublished in. 4 Trade Regi. Rep. (CCH) 1 39'., 0121 (19791). In March,1966, apparently in response to comments made by the public health community, the Commission reversed its posi- tion on the disclosure of tar and nicotine content in cigarette advertising, stating. that •'. . . it is in the public interest to promote the dissemination~ of crucial'informiation concerning cigarettes which may be material and desired by the consuminq public." Letter dated March 25, 1966:, from Federal Trade Conuois- sion to~ Cigiarette Manufacturers, republ'ishedin14 Trade Reg. Rep.

The Honorable Thomas A. Lu~ken April 27', 1988' Page 3 (CCH'), 1 39,0112 ' (1979 )~. Similarly, in an October 1, 1970 press release incident to a rulemaking proceeding then Chairman, Miles W. Ri'rkpatrick stated'that •(t]ihe Commission•s obj~ective i's to ensure that all cigarette advertising make these tar and!nicotinee disclosures as soon as posaible•'and requested that, inilieu of formal rulemaking, the industry devise a voluntary plan for testing and disclosure. On, December 1'7', 19'7.0, a voluntary agree- ment was entered~ inito by the major cigarette manufacturers and' approved' by the FTC. This agreement is still in effect today, except withireapect to: testing no longer being performed by the FTC. As indicated in our statement, ad'vertising, of low tar cigarettes was the sub ject of litigation between American and. Reynolds., American Brands, Inc. v. R. J. RevnoTd's Tobacco CompanyrR., 413 Fed,. Supp. 13'52 (S'..D'.lV.Y. 19'76). Tar claims and testing were also the subject of litigation between the Federal Trade Commission and Brown & Williamson concerning the Barclay cigarette. _FTC' v. Brown & Williamson Tobacco Company, 580, F'.Supp. 981, aff'd., 778 F.2d 3'5' (p.C'., Cir. 1985) . These cases shedi additi'lonial light on the involvement of the FTC' and' cigarette manufacturers in the advertising, of tar and nicotine. In conclusion, we believe that the present regulatory system for cigarette adaertisi'ng performs in a competent manner. We further believe, as stated to you in our initial response of April 12, 1988, that our advertisements complyin all respects with applicable laws and'regulati'~ons and are not, in any way, deceptive.