Tobacco Documents Online

s BRrns. AMERICAN TOBACCO Copy Request Form Request Number: 12 Organization: Physicians for a smoke free Canada I Request Details '7?2 Request Date: ....... ./... ........ ~" .................................... File Number: ...~...~....~..)..~...~...Box Number: ~(j ~) .~..~.. .o.oeoeI*OOOOeO. ..ee Page Range: First Page ~ 0 / 6" ~'~ ~ / ~) ~" Last Page ~ {7 / ~ 3 ~ ~. ~_~" Requested By: (Print Name) Details below will be filled in by Depository Staff Only II Copy Details Copied By: ..... ~ .............................. Date: ..... ~/./~../~., ............ Time:..~..'~~. ............. Date: Time: ........... oe eoooDoeeeoeo, oo e. ...see. .e.e. Deoo eooooooe.eoeDoo*.o see III Delivery Details Checked By:. ............................... ... . Date: ................. .. . Sent By: .......................................... Date: ..................... BATCo document for PFSFC 1 March 1999

Dare : Place : Present : NOTES ON MEETING WITH IMPERIAL TOBACCO LIMITED November 12th-13th* 1992 FFL Office, Vancouver George Ega~ Division Manager- B.C. Region Tom Saunders, District Manager Henry Wong, Regional Market Information Manager Bruce Russell, Sales Representzfive Harry Ma, Sales Representative Kelvin Ling 1. 2. . ) OHecttve: - To find out current status of SE 555 after being hunched in Vancouve~ region for 4 months. - To discuss with ITL regarding the 1993 sales and support plan for SE 555 in Vancouver. ITL's Inventory - Since the beginning of the hunch. ITL has bought from BATUKE a total of 400 cases (2.0 milllon) SE~7~. - 108 cases have been sold and 290 cases were still in stock. - All cases are 5 mi]J.e case. Distribution - During the initial launch period, SEFK was being d/stributed in 227 stores. At present, the distn~bution has extended to 350 stores and 1TL has planned to extend it to 400 stores in 1993. - ITL has a total disU'ibutioa of 4000 stores in Vancouver areas and their products were being sold through 50 wholesalers. - SEFK was currently being sold through 15 wholesalers - In Chinatown area, SEFK has roughly 50% dism'bution. Market Trend - ITL has provided the top 20 brands and families in Bd~h Columbia area. Refer to Appendix I. - According to Henry Wong, the trend in B.C. is moving from the Tar/Nit content of 16 rag. to a lighter segment of 10 - 14 rag. - The trend in the market also shows that the king size is more preferable than the regular. L,q ,,£3 BATCo document for PFSFC 1 March 1999

5. Grey Market - It is very difficult to estimate the size of the grey market. Since the control in the market is very tight, most of the grey market products were being traded among friends and the stock were being kept at home. - During the market visit, 2 packs of BIT's product (DDBO) with Oregon state tax stamp was being bought in Chin~owo. BIT's average sale to Oregon is around 700 miUe per month. 6. Media / Mereh Spend - As of 10/30/92, the YTD media/merch spend is C$ 12,932.00. Estimation for 1992 spend will be around C$16,000.00. Their estimation for the 1993 spending is C$ 40,000.00. FI'L requested us to supply more POS material KL agreed to liaise with both Joe Dysart and BATUXE's marketing deparunent on this issue. Further, KL agreed to send samples of the USA merchandising material for their reference. o Restrictions - All retail outlets were being classified into 3 groups. Group 1 stores allowed to have advertising in the szores. Group 2 stores allowed only those advertising being instaUed in the store prior to the implementation of the C51 Bill. Group 3 stores did not aUow any kind of adverlgsing in the store. - According to the next phase stated in C51 Bill, all advertising of any kind has to be removed from all stores as of Jan. 1, 1993. Only product display wiU be ~lowed. 8b Sponsorship - Any evem directly sponsored by a tobacco brand is not allowed. However, an event can be sponsored by a company with the brand name in it, e.g. Rothman Canada Limited, PlayePs Cananda Limited, etc. Hence, you am allowed to advertise the event with your brand name company on it. . Price Increase - Normal]y, the prorincial tax ~J.Ll be raised in March and the federal tax will be raised in April. The industry will normally raise their prices in September. - According to George Egan, ITL do not foresee any price increase in 1993. I0. Others - Due to the high retail price, the purchase pattern is leaning towards one or two packs purchase rather than carton purchase. - In downtow~ area where SEFK was being distributed, consumers are not limited to Orientals. A lot of young non-A.sian adults also bought the cigarettes. Due to the limited availability, they view SE~ as a trendy product with prestige. - During the market %-isit, a lot of store operators commented that the present SEFK smokers were switching from Du Maurier, Rothman and Winston. L#q O O', ",4 ,,.O BATCo document for PFSFC 1 March 1999

11. Agreed Action - rrL will continue to expand the distribution in both Chinatown and Viemamese area in IQ, 1993. In 2Q, ITL will seek diswibufion in those areas where t~ndy lifestyle dominate. - ITL will provide a monthly in-market sales volume and inventory report. On a quarterly basis, ITL v'iU provide a report on distribution and all madmt issues/commenr.s. - KL will visit Vancouver again in early April for the review of the IQ results. The second visit in 1993 wi£1 be in early July to review the results in the first h~If of 1993 and to decide the next action plan. - Since SEFK has been launched in Vancouver for only 4 months, it is very difficult to decide from the present sales volume if it is a success or a failure. ITL agreed to observe the performance of this brand for another 12 months before any evaluation or conclusion is drawn. 12. Recommendations - Due to the growing population of Asians in the Eastern part of Canada, especially in Toronto and Montreal, we felt that the market potential is a lot bigger in the Eastern region than in Vancouver. In 1993, it would be worthwhile for BATUKE to explore the possibility in launching the cigarettes in Toronto and Montreal By launching SEFK in these two areas, we can legalise the sales of this product in Canada and also may trigger an increase in the USA Indian Reservation Area sales. From the financial point of view, it may not provide us a very high return on investment for just Canada. However, if we include the poss1"ble increase of sales in the USA Indian Reservation Area as a result of our investment in Canada, the return on investment may look more plausible. CO: A.D.G. Pereira C. Figueiredo R. Brenmall L Pothecary L. Previati// ~. Beck C) ~===o -'4 ¢jrl BATCo document for PFSFC 1 March 1999

APPENDIX I OCT 16. 1992 Z MP E R I A L TOBACCO LTO/LTE E . CIGARETTE BRANO RANKING 12 NOS VEIGHTED SHARE 4 KIEOSRK2 SEP. 30. 1592 BRITISH COLUMBIA MARKET SHARE CUM. SHARE CJtG. RANK BRAND 12 NOB SiP 92 SHARE VS SIP St 1 PLAYERS LT RF I6.15 16,15 0.4G 2 PLAYERS RF 7.33 23.48 0.46 3 DUMAURIER KF 5.29 28.7? - 1.15 4 PLAYERS X LT RF 5.23 34.00 -0.35 5 EXPORT A LTS RF 4.57 38.57 -0.62 6 PLAYERS LT KF 3.51 42.08 O.SS 7 DUMAURIER RF 2.97 45.05 0.21 8 EXPORT A RF 2.7g 4T.84 -O.GS 9 ROTHMANS KF 2.59 50.42 -0.18 10 MATINEE X M KF 2.45 52.88 0.05 t1 ROTHMAN$ SP M KF 2.t9 55.07 -0.18 12 CRAVEN A KF 2.11 57.18 -0.26 13 NO 7 KF 1.9B 59.17 -0.22 14 EXPORT A X LT RF 1.72 60.89 -0.73 15 CRAVEN M KF 1.G7 S2.SS -0. I0 IG DUMAURIER LT KF 1.G3 G4.19 0.41 17 EXPORT • MID RF t.G2 65.81 -0.32 _ 18 PLAYERS X LT KF 1.57 67.38 0.1G 19 BAH DEL UL 100 1.21 68.59 0.01 20 MATINEE KF 1.21 69.80 -0.01 t~ C) 0". (.,a "-,4 ,,0 0,. BATCo document for PFSFC 1 March 1999

~J~P~TD~ 1 OCT tG. 1992 Z M P E R [ A L TOBACCO L TO/ LT E E . 18 CIGARETTE FAMILY RANKING KtEDSRX2 12 NQ$ wEZGHTEO SHARE SEP. 30. 19912 ..................... BRITZSH COLUMBZA Ii~tRKET SHARE CUM. SHARE CHG. RANK FAMZLY 12 MOB SEP 92 SHARE VS SEP SI I PLAYERS 36.77 36.77 t.92 2 DU MAURIER 15.37 52.14 2.2S 3 EXPORT 14.74 66.88 -2.26 4 MATZNEE 6.24 73.12 0,08 5 ROTHMANS S.7G 78.89 -0.41 6 CRAVEN "A" S.23 84.11 -0.53 7 6ENSGN 6 HEDGES &.SO 88.71 -0.02 8 NO.7 3.15 91.86 -0.41 9 CRAVEN "N" 2.11 93.98 -0.11 10 V|SCOUNT 1.53 95.51 -0.13 1I CAMEO 1.50 gT.0t -0.08 12 PETER ~ACKSON 0.66 97.66 -O.08 13 ~EDALL:ON 0.57 68.23 -Q.O$ 14 SPORTSMAN 0.49 98.72 ' -0.10 15 OUNHILL 0.45 99.17 0.05 ~5 vANTAGE 0.26 99.44 -0.07 ~7 ~AC=ONALD ~ENTH. 0.13 99.57 -0.0~ 18 ~.P.S. " 0.11 99.98 0.01 19 6ELMONT 0.10 99.78 -0.01 20 PALL MALL O,OG 99.94 -0,01 L~ 0 m O% "-4 ~0 -.j BATCo document for PFSFC 1 March 1999

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CANADA 1991 1992 1993 DOM Actual Est PLAN SEFK 20 3.0 9.0 SE INT SE 50's 0.0 1994 12.0 1995 14.0 1996 15.0 1997 16.0 3.0 9.0 12.0 14.0 15.0 16.0 200.00% 33.33% 16.67% 7.14% 6.67% L~ ~O ~O BATCo document for PFSFC 1 March 1999

CANADA DOM SEFK 20 SE INT SE 50's J F M A M J J A S O N 2.0 2.0 3.0 2.0 0.0 2.0 0.0 0.0 2.0 0.0 0.0 3.0 0,0 0,0 2.0 D TOTAL 9.0 0.0 0.0 0.0 9.0 C~ t~ O C~ BATCo document for PFSFC 1 March 1999

CANADA- DOMESTIG SEFK Code -806 201 CON PROM 202 DEALER PR 203 POS 204 FACIAS 205 SAMPL 206 SPONS 209 LTA 210 INCENT 211 VEH/SAL 212 FURNITURE 213 CATAL 1992 1993 ~...=..J 2400 3684 460O 2632 1053 42000 48421 TOTALS 49000 55789 1993 C$ Ex. Rate 1,9 7000 5000 2O00 92000 0 106000 FORECAST YEARS 1994. - 1997 MERCHANDISING CANADA - DOMESTIC SEFK 555~ 1994 1995 1996 1997 SPEND £ 60000 65000 70000 75000 ESTVOL .000,s 12000 14000 15000 16000 PER MILLE £ 5.00 4.64 4.67 4.69 TOTAL O ,,,,,j BATCo document for PFSFC 1 March 1999