Tobacco Documents Online

EU REGION EU TAX OBJECTIVES Continue pressure for early legislative solution for automatic trigger relief based on Commission's 1994 Article 4 Repon`. Prepare for 1996 Article 4 Review and Council decision in mid-1997, seeking removal or erosion of 57% minimum requirement )d90Z60Z1DSZ STRATEGIES and ACTIONS • Support Commission conclusion in 1994 Article 4 Report and encourage Commission to propose legislative solution to resolve automatic trigger. • Keep issue active throughout 1996 when Commission is preparing 1996 Review/legislative proposal. Organise symposia of academic experts, articles in journals, etc. Continue lobby of national governments via NMAs. • Achieve acceptance by Parliament of the removal of 57% minimum andlor reconfirmation of adjunct solution. • Continue to work for acceptance by the UK, leveraging the possible trade off with tax revisions for hand rolling tobacco (RYO). • Continue to demonstrate that the 57% has no impact on national interests of southern states in order to avoid blocks at ECOFIN. • Close at EU or national level those excise tax loopholes that we do not wish to be exploited in member states, without running risk of opening definitional debate which would disadvantage industry on product composition etc. • Be prepared with a workable proposal on tax approximation which moves the regime towards a "specific" solution; continue educating appropriate players.

NATIONAL TAXATION OBJECTlVES Fight any initiative to raise the effective tax burden on cigarettes and achieve the highest possible degree of tax restructuring in all markets. taz6oz1osZ STRATEGIES and ACTIONS • Exert political pressure to contest all threats to raise cigarettes taxes. Develop and exploit allies - smokers, farmers, retailers, unions. In particular, build-up consumer opposition based on successful campaigns run in 1995 (UK, France, Belgium, Italy) and extend concept to other countries (e.g., Germany, Netherlands, Spain) • Germany: A VAT rise is anticipated during plan period. Pressure will be maintained to achieve a partial offset in the excise incidence following adoption of automatic trigger relief at the EU level: We shall strive to defer the periodic review of excise tax that adjusts for inflation erosion, then minimize the adjustment We shall urge the authorities, also at the EU level, to close all loopholes that threaten fiscal revenues through products such as rolls, longies, or cigarillos. • It~ The state of public finances invites rises in indirect taxation. The consequences for Monital and for contraband inflow will help us prevent cigarette excise increases. Tax restructuring plans will be advanced, leveraged by the offer of additional local manufacturing. • France: Currently, the demand for higher fiscal revenues is being met by price increases, while efforts are being made to reduce revenue expectations, and tax restructuring is being proposed as a solution that reduces the risk of price wars. • Spain: The negative impact of the 1995 VAT increase and excise alignment with the EU minimum of 57% will be used to argue against further rises. Efforts will continue to remove the VAT surcharge borne by cigarettes. Any upsurge in contraband will be used as evidence of the need to restructure excise tax. Similarly, an eventual switch in the MPPC from Ducados to Fortuna could be partly offset for the industry through restructuring. • Bel ium: The vulnerability to price wars and the economic decline of the domestic industry will be exploited to resist excise incidence increases and to argue for tax restructuring. • Netherlands: Price changes in 1995 will delay Marlboro becoming MPPC for several years. Continue to push for EU relief from 57% minimum.

NATIONAL TAXATION OBJECTIVES STRATEGIES and ACTIONS • Portugal: The demise of Tabaqueira under high ad vaiorem excise taxes and price competition are inhibiting privatisation and constraining fiscal revenues. We shall argue for a more rational tax regime with a more specific structure. • Greece: The high public deficit maintains pressure on all tax sources. Tax restructuring will continue to be offered in the face of local industry opposition as a means to raise fiscal revenues without the government resorting to illegal price control. • U.K.: The government is implementing a strategy to reduce smoking by 40% between 19990 and 2000 by raising excise taxes by at least 3% per annum above the rate of inflation. We will continue the Fair Cigarette Tax Campaign begun in 1995, particularly targeting the expected Labor Government 80Z60ZlQSZ

CONSUMER FREEDOMS • Health concerns and the deteriorating social attitude regarding smoking and secondhand smoke are leading towards tighter smoking restrictions in which the IARC study may be a major factor. EU LEVEL • Continue to provide input to achieve an objective IARC study; defuse the potential impact of an adverse study due in 1996 by promoting industry/government endorsement of objective scientific principles, and by advance education of legislators and the media/public on the weaknesses of ETS science exposure, confounders and risk assessments • Push the principle of subsidiarity for smoking legislation issues • Avoid a smoking ban on public transport proposed under the guise of 1993 Directive to protect transport workers • Avoid a backdoor smoking ban by securing acceptable EU (CEN) indoor air quality standards. NATIONAL • Extend solutions programmes on courtesy and tolerance. • Encourage strengthening of smokers rights groups and mobilisation of businesses against bans. • Secure self regulatory agreements among stakeholders (unions, employers, Horeca). 6aZ6aelaSe

CONSUMER FREEDOMS In addition to national and local restrictions, the threat of EU-Ievel legislation is rapidly building. Unlike smoking at work, which has been treated as a worker safety & health matter, the EU currently does not have the legal competence to legislate public smoking, which falls under the scope of public rather than worker health. Nonetheless, the Commission can be expected to bring forward workplace restrictions, as with the transport worker proposal, to lobby for a wider scope of competence on public health during the next Treaty revisions, to exploit the IARC ETS Study, and to continue encouraging national and local smoking bans. Proactive and long-term programmes offer the best chance to minimise smoker/non-smoker polarisation and to avoid restrictive legislation. Developing and leveraging smokers' rights groups (SRGs) will be crucial. Near term, we need to ensure appropriate interpretation of the IARC Study, now due for publication during 1996. The 7-country study is based on original research, thus reducing inconsistency in methodology, one of the more conspicuous flaws of the US EPA Study on ETS. A compilation of results from all avaaaable research is, however, expected to follow as a monograph, providing a double "hit" to the industry during the Plan period. OBJECTIVES STRATEGIES and ACTIONS Avoid possible misrepresentation and misinterpretation of the IARC Study that might unjustifiably lead to legislated smoking restrictions ntZ6aZtOSZ • Obtain political endorsement of objective scientific principles; benefit from initiatives in other industries to achieve recognition of good epidemiological practices • Maintain the debate on ETS science among EU legislators • Undertake original studies on confounders and exposure to ensure these are appropriately addressed in the IARC Study, and achieve wide publication to ensure balanced perspective and coverage; coordinate with WRA • Educate selected MEPs and EP officials on ETS science and risk assessment to develop an ally network for use with DG V (the Commission's Health Directorate) • Develop, test, and refine ETS messages and communications materials (including ads on ETS science) for IARC release; educate selected media targets prior to release 0 Conduct extensive education and training programme for NMAs on ETS/restrictions

CONSUMER FREEDOMS OBJECTIVES STRATEGIES and ACTIONS Foster opposition to, and avoid support of ill- • Activate mechanism for coordinated pan-European actions by SRGs to bring smokers' voice to EU founded legislation legislative debate; expand existing SRGs and create new groups, where needed, to defend against ban threats • Continue European industry newsletter to disseminate third party news to EU legislators, policy makers and the media • Develop materials and programs statements on accommodation to support direct dialogue with legislators, allies and media • Equip and politicise the European Horeca association - Hotrec • Develop opposition to smoking bans among targeted European Employers Associations and Unions sectors • Develop "hard-core" group of businesses opposed to bans using mobilisation techniques t«6aztnSZ

CONSUMER FREEDOMS OBJECTIVES Promote acceptance and implementation of accommodation and tolerance programmes at the workplace as the most effective alternative to smoking bans Obtain Commission withdrawal of proposed Directive for the protection of transport workers health and safety, amended by the European Parliament to include a de facto total smoking ban Promote acceptance and implementation of accommodation and tolerance programmes in Horeca as the most effective alternative to smoking bans ztz6aZ1osz STRATEGIES and ACTIONS • Secure adoption of self-regulatory agreements among employers and unions • Obtain support among employer groups and workers, through education on ETS sciencellAQ, using workplace pan-European survey data; support adoption of accommodation programmes; develop workplace materials; shift focus to priority workplace safety issues • Create an ally base among businesses for self-regulation through mobilisation • Work with allies to advocate reasonable legislation • Reinforce and extend support for German position to obtain withdrawal under principle for subsidiarity (UK, the Netherlands, Italy and Denmark) • Generate support for withdrawal among Commissioners and DG VII (Transport), in favour of an acceptable proposal which provides maximum flexibility in line with existing Directives; delay discussions in Council working group • Create and market EU Horeca Guidelines to political/media targets • Maximise effectiveness of existing programmes in Belgium, Italy and Spain • Adapt Belgian ventilation project to other markets to support effective implementation of legislation • Conduct and market with Horeca groups, a pan-European business owner survey to establish and leverage opposition to severe legislative restrictions • Obtain support from Horeca sector for adoption of accommodation programme in the UK, Belgium, the Netherlands, Italy and Spain 0 Develop economic impact data in Spain and Italy; market via Horeca associations

CONSUMER FREEDOMS OBJECTIVES STRATEGIES and ACTIONS Reinforce smoker confidence and build support • Continue pan-European ad campaign to heighten general public awareness of ill-founded and unnecessary restrictions, followed by solution-oriented campaigns, and ETS science campaign • Build mass smoker support through package inserts and synergies with brandlsales programs Limit extension of Article 129 of the Treaty on European Union (Masstricht Treaty) and avoid EU competence for binding legislation on public health • Expand SRG membership bases, especially among opinion leaders and policy makers • Extend active involvement of SRGs into legislative and public debates • Capitalise on success of Associates for Research in Science of Enjoyment (ARISE) in building recognition and acceptance of the benefits of pleasure; expand scientific underpinning of "pleasure" message through scientific roundtables • Identify and mobilise potential allies, at member state level, and across European industries £1Z60Z1OSZ

MARKETING FREEDOMS • Strict legislation on marketing restrictions is being sought at both the EU and national levels • EU Council remains deadlocked on total ad ban legislation • Of the three acceding members to the EU, Sweden and Austria do not support Commission ad ban proposal CURRENT STATUS OF NATIONAL MARKETING FREEDOMS Cigarette Adver4sing Gemiany Italy France Spain Belgium Ne ands Greece UK. • National Press Yes No No Yes Yes Yes Yes Yes • Poster Yes No No Yes Yes Yes Yes Yes • Cinema Yes No No Yes Umited No Yes No Consumer Promotions Limited No Limited Limited Limited Limited Limited Yes Brand Image Promotions Yes Yes Limited Yes Yes Yes Yes Limited POSM Yes Yes Limited Yes Yes Yes Yes Yes Sponsorship Limited Yes Limited Yes Yes Yes Yes Limited MARKETING FREEDOMS EU LEVEL NATIONAL • Maintain blocking minority of total ad ban in Council following EU enlargement and UK government change • Advocate withdrawal of Commission proposal • Prevent further legislation; where appropriate, institute effective voluntary codes and youth smoking programs • In France, push to regain sponsorship and some advertising rights },IZ6QZIOSZ

MARKETING FREEDOMS The industry is threatened on the three levels: European, national and local. With respect to an EU ad_ ban, the position of the blocking minority remains strong; in fact Sweden and Austria oppose the Commission EU ad ban proposal. This would limit impact of possible change of government in the UK. The EU legal situation remains unresolved; while Council's Legal Service finds that the Commission's ad ban proposal, as a public health issue, would be beyond its competence, the Commission Legal Service maintains that the EU is competent on the basis of removing intro-Community trade distortions. Ad bans covering the national media are in place in Italy, Portugal, France and Finland, and further restrictions are threatened in Belgium, Spain, Greece, Netherlands, United Kingdom and Sweden. OBJECTIVES STRATEGIES and ACTIONS Ensure that the EU ad ban issue is blocked; and • Maintain the minority necessary in Council to block an ad ban; and work to increase blocking minority get Commission proposal withdrawn (Sweden, Austria, Spain, Luxembourg) • Exploit increasing support for withdrawal of Commission proposal in Council • Engage in more pro-active lobbying using Canadian Supreme Court ruling, economic impact studies and mobilising opponents to advertising bans. S1Z60ZlUSZ