Tobacco Documents Online

CORE OBJECTIVES Minimize impact of Federal, State and Local taxes on the • retail price of our products. Protect the rights of Adult consumers to smoke. Protect PM-USA's ability to market our products.~ Manage external and internal perceptions to benefit our business.~i,.=~ii!..

CIGARETTE SXCISE TAXES Situation Analysis: The Clinton Administration seeks to increase the federal excise tax on cigarettes up to 75¢ per pack to support a national health care program. State cigarette excise taxes have increased at an average annual rate of 8,5%* and states are tying increases to state health care programs on an accelerated basis. Although only 9 states allow local excise taxes on cigarettes, the number of cities and counties taxing, the product is increasing. In 1987, 392 cities and counties taxed cigarettes. By the end of 1993, that number will rise to 439; an average increase of 8 new taxing units per year. 1994 is an election year and therefore we may not face as many battles as this past year. * Slightly lower for an election year, and higher for a non-election year.

::.: ~: ::-.'-..~. Ovel'a]l, most respondents had a greater awareness of the proposed '-;--.tunding sources (i.e., cigarette, gasoline and Income tax) for the ~ :°= ~ National Health: Care Program than about the plan. Most respondents ::.~ .i.~ h~ad little Understanding-of•the core intent of the program and how ....... i ] :,.the. ~rogram Will personally affect them. ..the Federal Government's ability to administer the program. ~.;13i~t~restii~gly, the majority were in favor of national coverage despite their Confusion about the plan and their cynicism about ~:.~ . ~.-Attitudes about funding tend to reflect how consumers feel they will • be personally affected by any increases in tax or copayment sources. That is, most respondents were 'more than happy to "pass the buck" • - to someone elSe or Share theburden provided the tax was not on a:_ -: :~ ; ;product they use on a regular basis (such as gasoline, etc.). " :~-~ spontaneous reactions tO the cigaretteexcise tax tended to be driven ~.:-:,,~+~i by"resl~ondents' personal attitudes about smoking. The non-smokers• i. ~~ ~?_~~sli_o.~!d~par_ry a...greater Share of the financial burden; ' Most Of these ............ individuals feel that smokers add to the cost of healthcare and .......................... ..... therefore should= ........... bear a g~;e ater portio n-0f the .............................. burden.

: ...... ;. T-hei~Ogt ~ser@fia-sive ai, gume-i~t~- aoainst the excise tax on cigarettes ~. ~ ~.- ~iN~.~-.. .......................................................... -- -Job& Income Loss ,.. Bluecollar respondents related to this argument on a personal ~ " level " including theii~selves/family/friends as being directly .......... : .......... !affec.~e_q,:..~y the..tax. White collar respondents were more ........... .~;"- d~t~chi~d-fationalizing the ~;g-ument as persuasive because Of i:~I' ...... :- ~,. : .... it~ negativeimpact on jobs and the economy. ! ~ ~ i: .'-- -'5~ !. 2.: , " " .... " .......... " ......................... ~--: ~" ., that the government Wastes/misspends money. The blue collar of our _ . :~g.r~ip_s..._.w_e_._r.e...p_articuiaHyad&mant about taking care .... nation's problems be~org-/~-~-e~d-ifig m~ney on foreign aid. . ~ ~..,,~,~..--=~.Bad Revenue Source -.; ...... ~ThiS was also brought up independently. Many smokers and .......... " ..... '~ nOn-smokers easily grasped the problem of relying on an ....................... ~--'unreliabie-revenue base~ for a IOng:termprogram and ~.~: ;-i !i ;=.~.. ;; .e.xpressed concern. ,over this issue. .... =~:!-~The. ,s!hgling out One group" argument also received a fairly ..~ i::emot!~l £~sponse. aos,t- smokers and a few non-smokers felt that ' !--i. L~'~"~i~*~fl~;~~i~-r~x~tiOh'i~divisive-'~-a~entiment that ~as nbt ........ .... i positively received. Smokers tended to feel particularly strong about i ..; i! this issue.

SMOKING RESTRICTIONS Situat=onys~s: .. ' : - ~ The Bad News The EPA Report received wide publicity and has caused an acceleration in proposed bans and restrictions. Currently 47 states have some form of smoking restrictions. Smoking is restricted in Private workplaces ih 19 states; 28 states restrict smoking in restaurants. This year alone 18 states and 269 localities passed smoldng restrictions. Measures are still pending in 6 states and 165 localities. Smoking restrictions have been estimated, this year alone, to have decreased PM profits by $40 million. - . Restrictions in shopping malls and arenas have been added to workplace and restaurant restrictions. The Good News More than 9,000 restaurants nationwide participate in the Accommodation Program. Over 250,000 merchandise pieces have been distributed featuring The Accommodation Program Symbol. Thirteen states currently preempt local smoking restrictions. Since 1989, 29 states, the District of Columbia and the city of Boston have enacted legislation which prohibits employment discrimination against smokers.

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THE ACCOM~.~.DATK)N PROGRAM Current Asso~ietion Participants by State (as of 11/12/~) IA COUNTRmS Gt~am ............ .2 ~ ........... 5

Accommo~htion Program Priority for Targeted States I In~ea~ Efforts I Follow-Up I ~Ih Lilt

p • m • ~ • Restaurants: Hotels / Motels: Bowling Cec~ters: 374 Malls: 38 Alrportm: 1 (Rhode Island) PROGRAM TOTAL: 9,013 i

THE ACCOMMODATION PROGRAM How does The Program work? 4 Phase Continuum

MOBILJZA TION CONTINUUM PHASE I SOUCITATION " NPAEF • ISRAE

MOBILIT TTON CON'ITNUUM ..... il| |1 III I I II I I I I I I | I II I I SoucrrATION • Direct Mail • ,'rrade ~ ~ • NRAEF • ISRAE • Chains PHASE II ENLISTMENT Materials • Source Book • Training Video • HVAC Technical Support

MOBILIZ CONTINUUM I I I I I I I I I III i II I SOLICITATION • Trade Show Exhibits - NFIAEF • ISR/E ENUSTMENT • #8(X) Hotline • Free Slgnage & Matedals -Source Book • Trldrdng Video , HVAC Technical SuPlx:Ct PHASE HI RELAllONSHIP BUILDING ° Quarlerly Iq~ * Issues Bulletin -Trade * Spea~ers' Bure=u • J~r~ Efforts (KGF/M~C] - Video New=le~er - Seminars

MOBILIZA Ti N CONTINUUM PHASE N SOUCITATION "Presentations • Direct Mail . Trade Show Exhibits ENLISTMENT • Free Signage & Materials • Source Book • Training Video • HVAC Technical Support RELATIONSHIP BUILDING • Quarterly Newsletter • Issues Bulletin - Consumer - Trade • Joint Efforts (KGF/MBC] - Video ~~ - Seminars MOBILIZATION Develop "SWAT" Teams

Recently ulitized The AccommodMion Program to effectively advtmce Government Affaim' legislative agenda in a number of states, In response to proposed statewide smoking ban in Pennsylvania last month: • Identified restaurant owners to testify at hearings Maximized use of exhibit booth at PA Restaurant Association Trade Show to mobilize business owners to sign a petition, and write letters to elec~e~ officials. Produced timely VNR which was widely aired across the state. 69e~}}Og

NON-.~OKERS WELCOME STEPS Shopping Ma~s - DeBartolo Corp. / 38 malls nationwide • Signage placed 11/19/93 • VNR produced and distributed - Future Plans in development Airports - Atlanta - Denver Hotels . Chain Emphasis National Platform - 1996 Olympics/Atlanta as national exposure opportunity

SMOKING .5AN ORDINANCE AUSTIN, TEXAS Situati.on • .On 12/2, City Council Agrees to Hear Proposed. Sm.oking Ban Ordinance in One Week or on 12/9 • Proposal Bans SmoEing in Restaurants and Other PubliCokl~ Places and Severely Restricts Smoking. in the • Austin, Texas City Council is as Liberal as the Berkeley," California City Council.

SMOKING E~AN ORDINANC AUSTIN, TEXAS • Create Coalition to Kill Ordinance in One Week Urge Coalition to Seek Less Onerous ., , '. -~" : ~ : . . . ~

SMOKING i AN ORDINANC • . AUSTIN, TEXAS Resources Activated • PM and RJR Smokers Call City Council Members Prior to the Hearing .. ~;.. • and Testify at the Hearing ..,. +"o PM Hires Consultant to Organize Hospitality Industry ~~.. • PM's Consultant Convinces Austin Restaurant Association to Oppose the Ordinance and Join. the Texas Restaurant Association's Activities • TX Restaurant Associa.t n Ph.o.ne Banks Restaurateurs and.Hires Local Consults to Lobby Ind=v,dual C~ty Council Members. . i nd R o $ u e s, Re • PM a JR Salesf rce Circ late Fly rs to Retmler staurateurs, Entertainment Contacts and Consumers • iiller..~Distributor Alerted and. Has Agreed to Assist ~+. ..

SMOKING BAN ORDINANC AUSTIN, TEXAS • Smoking Ban Ordinance was Defeated on a 3 to 3 Vote ~ -- 5 Hour Hearing Held on 12/9 ' --- 125 Witnesses Sign Up to Testify -63 for the ordinance (e.g., anti-smoking activities, health grou~i representatives, etc.) -62 against the ordinance (e.g., restaurant and bar owners and~ ..... employees, bowling alley, and bingo parlor proprietors, smoker~ • rights activistsi music.!ndust~ representatives, smokers and a fe~ , ...~. ~.,. non-smokers.~ ..=• CoalitionContinues to Work for More Reasonable Ordinance. • . Next Hearing Delayed until February 1994 ..~.~,i..~i!i ~! ~ ~ ~.i~ , i ..... ~

" _iii.i .i: 1994 CALIFORNIA PLAN • .. Situation . ............................ ... • -;- _ ........ -. ;: ~-- ,_ . ;; :;~?i~E MAJOR CITIES HAVE BANNED SMOKING -!?: ~ :.San Francisco BansSmoking in all Workplaces Inclu(~ing Offices, Restaurants, etc. . -- Los Angeles Bans Smoking in Restaurants (referendum pending) -- San Jose Bans Smoking in all Public Places Including Restaurants • :-~ : ": ...... ;.~: .... • ...~ ;~.~ . ~ "i'~ii "~. san i~iego ~B~ns Smoking inthe Workplace and Restricts Smoking," to 30% of Seating Capacity in Restaurants m Sacramento BansSm0king in Offices and Restaurants • Antis Continue to Seek Smoking Bans on the Local Level • Legislative Leadership will Negotiate Deal between industr~ and Antis but Only if We Put Antis on Defensive Outside of Legislature . ' "---F~e~,-~iPo'lii~g Says Californians Want Smoking R~.tri~ti~ns .................... ...... " t ' ' " A.rgumentsLosing as Indus ry s Economic Impact Credibility Glanzl ~•-~::Stu'dies Have More Credibility with Media • : - -Two State Level Bills are Pending Final Disposition -- AB13 (Friedman) Bans Smoking in the Workpiacelncludin~: Restaurants .... :.- : " : : ..... •m. AB996 (Tucker) Allows Smoking in Public Places .Including Restaurants ....... ................ , .,~.. , .... .~.. ~ . .o.CAL-OSHA has a Minimum Ventilation Standard• Regulati0n,fo~i ; " W0r.kplaces A ioved in 1986 ~ , ..... ~.. = .... ..;- : :...: ..... :. -: : :: ..... .. • .... ., .... :: .... . ...... ... ..... ..-., ~. ........ .. ........ :;.,~., " :': ..... " " - . .,. ~ . :~.::i,. ..,..,..~" " . .,; .......=,. ..... ~: ....

..... 1994 CALIFORNIA PLAN • Pass Language WhichAll0ws Smoking In California and Preempt..$ Localities from Approving More Onerous Laws " ., Strategy .. • LEGISLATIVE -- Introduce Legislation to Scatter Antis Resources m State Level Pursue Passage of AB996 .or Other Comprehensive Accommodation Legislation -Introduce Numerous Accommodation Bills Appropriate Coalition Members • • Workplace (Buslness Organizations) • Restaurant (Local Restaurant Associations) • Hotel (Hotet~Motel Association) - Pursue Cl~anges i~Pr~p 99 Funds Allocation Vending Restri~tio~s/Preem ption Supported• by • Legislative Audit of How Funds Have Been Used Since 1989 o Reallocate Funds for Other Purposes Such• as Youth Education -- - Proactively Seek Marketing Legislation. :., ... : • ADAMHA Licensi.~g/Preemption to Comply with Federal -.. . ..... HHS Rules and Regulations Based on Synar Language " • ~ . .~ ..,~, :: ":.

1.994 CALIFORNIA PLAN -Reporting Requirements for Percent.of Funds Used for Research vs. Salaries • Cap Administrative Costs, Salaries, Lobbying Expenditures • Establish Minimum Percent of Funds for Research -Pass Joint Resolution Urging US-OSHA to Develop IAQ Standards - Bell Gardens Seek Local Level Accommodation Laws in a Limited Number of Localities to Refocus Antis and Show Accommodation is Acceptable , • _. Anaheim .. ~ - Rancho Mirage - El Cajo.n - Coronado - Stockton

1994 CALIFORNIA PLAN Jl II .--.~_,~__.-~_~=..~- -- ~ __~.~-.-. _~--. ...... ~-- _ ___ -r,.~-- --St-~ate--g£ ..... ........... ....._.-LEGAL - Sue a Locality for Banning Smoking in the Workplace Based on Current CAL-OSHA Statutory Authority Preempting Other " standards forthe Workplace .-...; ~:..m San .Francisco Ordinance Bans Smoking in the Workplace and Defines Workplace Br0ac~ly - " --~.._ Legal Department Concurs and Has Retained Local Firm to Pursue Possible Suit in San Francisco Other Local Ordinances are Pending Legal Review to Identify Other Possible Venues .:~

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--Strateav ........... • INITIATIVE ~ S~ng Restrictio~Preemption Initiative on the NOvember 1~4 ~ . -- PreliminawP~F~ Results • -~. - -. . .. .. " . ..._, ;.~ .~..~. ........ i :~ Overall S~~ for Restrictions as Oppos~ to All Out Ban " - PMUSA M~gng Research is Reviewing Polling Meth~o.o~ and R~ults to Determine Whether Additional Polling is R~uir~ • ~ Deadline to Q~ In~iative Februaw 1, 1~ File ~nguage with AG - 25 Working. Days for Legislative Analyst and .~. - --~ Dir~tor of Finance ...... :.: ... March 5, 19¢J4 " March 19, 1994 ~ March 20, 1~4 ..... ..--i~ 'May 2, 1994 15 Calendar Days for AG AG Authorizes .............. Begin Signature Collection 45~ Days (45 Days for LA or 52 days if we begin January 31, 1994) Tum in signatures for Random Sample (6.5% validity is required on 652,000 signatures) ...... ~... qualify =nitiative for November!994_~_ ¢=

....MARKETING RESTRICTIONS " ~;~G :: ';i:;~:~~:"'~"~~f'~"~E~':;~"~a=~:~:': :";~ ....... ~*.~-~4~==-;,, ............. .:-, ::~"":~:..:~:~ " " ::~ ~'~'~= "'~ *~"'~' " '" ...... " .. .... ............ ~=~,~ .... ~ ...... ~. ..... , ......... .. ... . .......................................... .... a uauon • '... ........ - ......' ........ " ~.:~, .. ............................ -. ...... :.... - . .. ~,~ ......... ~ ,1 ~..-~; ~..~. ~..~,,.,:~ .~...~.... : ..... ~,..~ .~,. , , . .~. . ......... .., ..... ~-:~ ~ ..... .~ ~ ~:~:'~.v ~ .--, ; :-.:~-. , " -.=. , >~..~: ~.:~. .-: . ..,..~, "~ ~[.- . .- ,. ~_~..:~:.~.~. - ~-. ~...~ . ;..~- ~.~~: =~ =. ~'~~¢. =. ; = - 2: .-. . ..: .~ ~:..:~-..:.-Z- - -.----:: ~'~-;"~ ~- ~:,~;-"~:~~;~~.~ ~ -..=.~.~~. ~ ,~- ~e~Z . _:~ .., = in 1.~2.~e passage of the 8ynar Amendment threat~n.M to wi~ho!d ove[, ~ :2 $!.,~,~i!l.ion i~_Sqb.s~nce..A~e ~.~tal Health Sewices Agency Substance ; abuse block grants to states who do not dem0~s~r~i~~f0~cement of~eir ' :: mi~i~~ age sales law: ..................... ...... : .... -* In 1993 regulations pr~sed by HHS supersede ~e r~uirementsof "~ ~-:~ t~'"~n6m~nt and suggest thatgtat~ ban ven6in~ sa~es, establish " ~;- '::- i~cens~n~ requirements an~ e~n6uct ~n~ o~era~ns. - ~n ~ 994 state e~o~s t~ c~m~lg with th~ S~nar ~men6ment w~l : many states to consider severe res~ictions on the marketing of tobac~ products. • .~ -- " ..... ~-. .~.:.~ - ,: . -,, ~ . : . ...... ,- . ..... ~,,~ ........... .~ ........ . ... • 1990-1993 Approved Legislative Activi~: " Billboard Adveffising Restric~ons: State - 5 bills; Local - 21 bills ~,: ~:~; .... .,- ..... Vending Bans: Local - 57 bills " .~::- . Vending restd~ions: State-23 bills; Local - 178 bills .... ---. Self Se~ce Display Bans: Local- 20 bills~ ....... .... Sampling Bans: State- 3 bills; L~I - ~ bills. = " :. " Coupon Bans: Stat~ 3 bills; Local ~0 bills. ~ ;~ ..'- ...... ~ ....... = ,. ":. ~ .,,,....: ~. "... ..... " "" AntiZ~oking groups such as STAT and INFACT have received national ttemptsi-0 po~ igare~ : • :-- ~e~ia a~ention in their a ray c e a ve~ising as ~~ ~h~u~gingydutfi {o~m~k~ ~ ..........