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State Plan 1997 Region VII Page 1 of 10 as of 9/20/96 ILLINOIS I. State Overview 1996 ~ J J ~ Legislature meets annually, length of session varies Legislature currently controlled by Republicans (33-26 Senate, 64-54 House) November 1996 elections could result in status quo, Democrat control, or a split legislature Political environment somewhat favorable II. Key Issues 1997 • Proactive: AAA legislation Training requirements, inspection protocol, penalties for minors, statewide uniformity, and possibly licensing • Defensive: Excise Tax • Chicago Divestment Public Place Smoking Restrictions Proactive: AAA ordinance - Training, penalties for retaifers. and minors Defensive: City litigation Ingredients labeling Smoking bans III. Strateciles/Tactics 1997 0 Strengthen relationships and coordination with Kraft and Miller. 0 Strengthen relationships with sales force. 0 Strengthen relationships with retail trade association allies as well as hospitality industry, expand current network when possible.

State Plan 1997 Region VII Page 2 of 10 as of 9/20/96 ILLINOIS (continued) 0 Initiate face to face meetings with legislative leadership in both bodies to discuss issues early in session. 0 Coordinate media efforts with M.A.NX as well as assist third-party allies in their media efforts. IV. Recommended Activities/Tools • Proactive: AAA Legislation - Select district direct account mail/phone banks - Possible press conference including third party allies - General public relations support via M.A.N. • Key Allies - Illinois Retail Merchants Association - Illinois Tobacco & Candy Distributors • Defensive: ExciseTax Divestment Public place smoking restrictions Possible consumer mail/phone banks on excise tax Talking points, briefings, and media outreach on both Medicaid and Divestment • Key Allies - Illinois Retail Merchants Association - Illinois Tobacco & Candy Distributors - Taxpayers Federation of Illinois - Chamber of Commerce - Illinois Manufacturers' Association - Illinois Hotel & Motel Association - Illinois Restaurant Association

State Plan 1997 Region VII Page 3 of 10 as of 9/20/96 ILLINOIS (continued) Chicago Proactive: AAAordinance - Select district direct account mail/phone banks - Possible press conference including third party allies - General public relations support via M.A.N. • Key Allies - Illinois Retail Merchants Association - Illinois Tobacco & Candy Distributors Defensive: City litigation Ingredients Labeling Smoking Bans Possible consumer mail/phone banks on excise tax Talking points, briefings, and media outreach on both Medicaid and Divestment • Key Allies - Illinois Retail Merchants Association - Illinois Tobacco & Candy Distributors - Taxpayers Federation of Illinois - Chamber of Commerce - Illinois Manufacturers' Association - Illinois Hotel & Motel Association - Illinois Restaurant Association

State Plan 1997 Region VII Page 4 of 10 as of 9/20/96 IOWA I. State Overview 1996 v Legislature meets annually, length of session varies. v Control of legislature currently split; Republicans control the House (64 - 36), while Democrats control the Senate (27-23). November 1996 elections should result in Republicans retaining control of the House and gaining seats in the Senate, with a chance of gaining a majority there as well. Political environment is unfavorable/volatile. II. Key Issues 1997 • Proactive: AAA legislation - Training requirements, signage, minor penalties, inspection protocol • Defensive: Smoking Uniformity Marketing Uniformity Divestment Medicaid Litigation Legislation III. Strategies/Tactics 1997 0 Strengthen relationships and coordination with Kraft and Miller. 0 Strengthen relationships with sales force. 0 Strengthen relationships with retail trade association allies as well as hospitality industry, expand current network when possible. 0 Initiate face to face meetings with legislative leadership in both bodies to discuss issues early in session. 0 Coordinate media efforts with M.A.N. as well as assist third-party allies in their media efforts.

State Plan 1997 Region VII Page 5 of 10 as of 9/20(96 IOWA (continued) IV. Recommended Activities/Tools • Proactive: AAA Legislation - Possible select district direct account mail/phone banks - Possible retailer/wholesaler visits to Capitol - Possible public relations to support • Key Allies - Iowa Responsible Retailer Coalition - Iowa Candy and Tobacco Wholesalers Association - Independent Retail Convenience Store Chains • Defensive: Smoking Uniformity Marketing Uniformity Divestment Medicaid Litigation Legislation Individual consumer and hospitality business mail/phone banks re: smoking uniformity Direct account mail/phone banks re: marketing uniformity Extensive use of sales force to re-enforce messages Talking points. briefings, and media outreach on both Medicaid and Divestment • Key Allies - Iowa Responsible Retailers Association - Iowa Candy and Tobacco Wholesalers Association - Iowa Hospitality Association - Iowa Lodging Association - Iowa Taxpayers Association - Iowa Association of Business & Industry

State Plan 1997 Region VII Page 6 of 10 as of 9/20/96 MINNESOTA I. State Overview 1996 J Legislature meets annually, length of session varies. Control of legislature currently in hands of Democrats; 42-25 in Senate, 69-65 in House. November elections likely to result in roughly the same numbers, though there is an outside chance that Republicans could capture the House. "J Political environment is highly unfavorable. 11, Key Issues 1997 • Proactive: AAA legislation - Licensing, uniformity, penalties, training • Defensive: Smoking Uniformity Excise Tax Divestment Ingredients Disclosure/Labeling "Fire Safe" Cigarettes • LOcal ISsues: Severe Marketing Restrictions III. Strategies/Tactics 1997 0 Strengthen relationships and coordination with Kraft and Miller. 0 Strengthen relationships with sales force. 0 Strengthen relationships with retail trade association allies as well as hospitality industry, expand current network when possible. 0 Initiate face to face meetings with legislative leadership in both bodies to discuss issues early in session. 0 Coordinate media efforts with M.A.N. as well as assist third-party allies in their media efforts.

State Plan 1997 Region VII Page 7 of 10 as of 9/20/96 MINNESOTA (continued) IV. Recommended Activities/Tools • Proactive: AAA Legislation banks - Possible statewide/select district direct account mail/phone - General public relations support via M.A.N. • Key Allies - MN Responsible Retailer Coaiition - MN Wholesalers Association - MN Grocers Association - MN Retail Merchants Association - MN Petroleum Marketers Association - MN Association of Convenience Stores • Defensive: Smoking Uniformity Excise Tax Divestment Ingredients Disclosure Individual consumer and hospitality business mail/phone banks re: smoking uniformity Direct account mail/phone banks re: smoking uniformity Extensive use of Sales Force to re-enforce messages Talking points, briefings, and media outreach on both Medicaid and divestment • Key Allies - MN Responsible Retailer Coalition - MN Wholesalers Association - MN Grocers Association - MN Retail Merchants Association - MN Petroleum Marketers Association - MN Association of Convenience Stores - MN Taxpayers Association - MN Licensed Beverage Association

State Plan 1997 Region VII Page 8 of 10 as of 9/20/96 MINNESOTA (continued) • Local Issues: Severe Marketing Restrictions Select direct account mail/phone banks Extensive use of Sales Force Key Allies MN Responsible Retailer Coalition MN Wholesalers Association MN Grocers Association MN Retail Merchants Association MN Petroleum Marketers Association

State Plan 1997 Region VII Page 9 of 10 as of 9/20/96 WISCONSIN I. State Overview 1996 Legislature meets annually, length of session varies v Legislature due to Special Recall Election results in June '96, currently split; Democrats now control the Senate (17-16), Republicans control the House 51-48. V November 1996 elections could result in status quo with Republicans possibly adding to their majority in the House, or both bodies could be controlled by the same party, somewhat of a long- shot from both perspectives. Political environment is unfavorable. II. Key Issues 1997 • Proactive: AAA legislation - Training, penalties, strengthened uniformity, inspection protocol • Defensive: Marketing Uniformity Smoking Restrictions Divestment Medicaid Litigation Legislation Excise Tax III. Strategies/Tactics 1997 0 Strengthen relationships and coordination with Kraft and Miller. 0 Strengthen relationships with sales force. 0 Strengthen relationships with retail trade association allies as well as hospitality industry, expand current network when possible. 0 Initiate face to face meetings with legis,lative leadership in both bodies to discuss issues early in session. 0 Coordinate media efforts with MAN. as well as assist third-party allies in their media efforts. N 0 01 rv 10 ~ 0 cr, -.1 03

State Plan 1997 Region Vil Page 10 of 10 as of 9/20/96 WISCONSIN (continued) iV . Recommended Activities/Tools Proactive: AAA Legislation - Possible statewide/select district direct account mail/phone banks General public relations support via M.A.N. • Key Allies - Wisconsin Retail Merchants Federation - Wisconsin Convenience Stores - Wisconsin Petroleum Marketers Assoc. • Defensive: Marketing Uniformity Excise Tax Divestment Ingredients Disclosure Smoking Uniformity - Individual consumer and hospitality business mail/phone banks re: smoking uniformity - Direct account mail/phone banks re: marketing uniformity - Extensive use of sales force to re-enforce messages - Talking points, briefings, and media outreach on both Medicaid and Divestment • Key Allies - Wisconsin Retail Merchants Federation - Wisconsin Convenience Stores - Wisconsin Petroleum Marketers Assoc. - Wisconsin Tobacco Growers - Wisconsin Restaurant Association - Wisconsin Tavern League