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BRITISH AMERICAN TOBACCO Copy Request Form Organization: W.H.O. Request Number: 184 Request Details ~'f ~/~. Request Date: ........................... liiom l lmiQoooDe ebmleoeJOeaooDQea O• File Number:7~~../..~.. ........... Box Number: ..~.} ........ ~ ~ l.s • .o • •o* Q • • * QoooaD Page Range: First Page ~ ~ ~ ~ 2_. 7 O f'~ 0 LastPage ~ ~ ~_.,~_... "~_~py../ /_./b-..~" ...... Requested By: (Print Name),.,~.~,,~,,, ..... Details below will be filled in by Depository, Staff Only II Copy Details L,~v .~/~. Copied By: .q~'~. .... • •o• ••oo • • •o • • is• •e •e••to••oeo • i • • • • • Date: ,~~q,~, .............., ,, ,., • Time: ,~,'3~l,qi~, ............... Copy Checked By: • • • • • •o • • • ••• i• al• • • • • e* • •o • emeeoQ• • ol •o •elolel • • o• •o •e • Q• Date: • .... . . . ...... Time: ............. i III Delivery Details Checked By: . . . .......... Date: ......... Sent By: ..... . . ...... Date: . . BAT Industries document for WHO 5 March 1999

NOTE YOL TOBACCO STRATEGT REVT~ TEAM ~EETINC - 26TH FZBXUAET 1992 | Budapest Conference : 20th-22nd MaT I992 A conference will be held in the Rilton Rotel, Budapest, from 20th to 22nd Fay. The purpose of this conference will be to provide informat£on to B.A.T Industrles' main contacts in Eastern Europe, including the CIS, on:- (a) Key characteristics of the tobacco industry worldwide. (b) BAT's position within the industry. (c) The Group's strengths. (d) BAT's intentions for developing within the region. The conference will also be attended by the top management of the Group's tobacco businesses and by the team charged w~th developing the Group's interests in the region. Attached to this note are:- 1. A draft progr-mme. 2. A list of people nominated to attend. Dr. Salter will be responsible for co-ordinating the programme for the conference itself and M~ss Black will be responsible for the administrative arrangements and for the social programme. It is proposed that the people nominating the delegates should be responslble for invltlng them to the conference, enclosing a formal invitation from the Chairman and a questionnaire regarding the administrative arrangements. B.A.T Industries will be respousible for all arrangements from the start to the end of the conference but it will be the responsibility of the sponsoring company to resolve any problems regarding travel to Budapest, expenses, etc. Speakers for the first morning of the conference will be briefed by Dr. Salter who will also discuss with Mr. Bramley, Mr. Herter and Mr. Prltchard the form and content of the other presentations. Issues to be discussed at the Tobacco Strategy Review Te-~ ~eeting on 26th February will be:- (a) The programme and llst of attendees. (b) The arrangements for inviting delegates. (c) " Any other issues arising from the conference. ~ote : It is also intended to hold a meeting befoze the conference, starting at 9.00 a.m. on Wednesday, 20th May for the people who attended the meeting at Sandwich on 10th-llth December, when the action programme for developing new markets was discussed. This meeting viii be the subject of a separate note. RS/DJS "'/ 19th February 1992 BAT INDUSTRIES CONFIDENTIAL- CATEGORY !" MINNESOTA TOBACCO LITIGATION t~ O r~ f~5 r,,J ...j r.,_ BAT Industries document for WHO 5 March 1999

Budapest Conference : 2Och-22nd Ha7 1992 . 7='' , ! • Draft Programme WednesdaT~ 20th MF.a~, 6.00 p.m. : Reception & Dinner: Welcome by the Chairman ThursdaT~ 2IsC w-7 9.00 - 9.30 a.m. : The Chairman 9.30- 10.30 a.m. : ~£r. B.D. Brr, ley 10.30 - 11.00 a.m. : Coffee 11.00 - 11.45 a.m. : 11.45 - 12.30 p.m. : 12.30 - 2.30 p.m. : Lunch 2.30 - 2.A5 p.m. : The Chairman 2.45 - 3.30 p.m. : See Note 3.30 - 4.00 p.m. : Tea &.O0 - ~.20 p.m. : 4.20 - 4.40 p.m. : 4.40 - 5.00 p.m. : Eveulng Friday, 22nd Hay : Introduction co the Conference : The Tobacco Industry and BAT's posiClon ~rithlu iC P~. H. Taylor : Lea£ ~c. G. Oltermann : Production : ~ntzoducclon to Pecs : Peca/Hungarian Tobacco KarkeC l'~. U.G.V. Hercer : KepreaenCatlon elsewhere iu Eastern Europe See Note : Poland See NoCe : Czechoslovakia Boat Tr~p and Dinner 9.00 - 9.20 a.m. : See Hoce 9.20 - 9.40 a.m. : See HoCe 9.~0 - 10.00 a.m. : See Note 10.00 - 10.30 a.m. : Coffee 10.30 - 11.00 a.m. 11.00 - 11.20 a.m. 11.20 - 11.40 a.m. 11.40 - 12.00 p.m. : Yugoslavia : Romauia : Bulgaria : Hr. U.C.V. Hercer : RepreseuCeClon in CIS : See Note : Russia : See Note : Ukraine : Chef,manta Sumlnary 12.00 : Lunch and disperse " Not___~e : IC is expected thaC the presentations from the individual countries will cover the else of the market, the structure of the industry, BAT's current pos~t~ou relatlve to competitors and an assessment o£ the =aln opportunlC~es £or expansion, tsk~n~ into account the poliCical/economlc slCuaClon and the prospects for prlvaclsaCion. Hr. HerCer will arrange and brief the speakers except Chose for ~omania (Mr. PrlCchard) and Hungary (Kr. Bramley). RSIDJS 19th February 1992 BAT INDUSTRIES CONFIDENTIAL- CATEGORY ]" MINNESOTA TOBACCO EZ) LITIGATION BAT Industries document for WHO 5 March 1999

BUDAFKST }gCET~lqG : 20TB-221~ HAT 1992 Delegate List B.A.T Yndustr~es Sir Patrick Sheehy Kr. D.S. Watterton Mr. A. van Waay Hr. D.J. Pearce Miss A. Johnson Hr. H. Taylor Hr. M. Booker Dipl. Ing. Viktor Hatovcik (Acting Director, CSTP, Bratlslavla) ~van Dichev (President, Bulgartabac, Sofia, BulEarla) ~ATCo. TOTAL Mr. B.D. Bramley Mr. J. Rembiszewski Mr. N.G. Brookes Pets Mr. M. Jennings (General Manager) Mr. A. Page (Leaf Director) Mr. S. Jurgens (Marketing Director) Mr. S. Irim~ (Director) MS. E. Simon (Financial Planning) Mr. A. Molnar (Production Director) Hr. J. Cabot (Logistics) Hr. L. Komalski (Public A/falrs) Brmm & Williamson TOTAL TOTAL Hr. R.J. Prltchard Hr. T.E. Whitehair Mr. I.D. Macdonald Mr. C. DeWolf Mr. E. LybaerC Ms. B. Moore Mr. Nichlta (General Manager, Romanian Tobacco Monopoly) Hr. NeaEomiranu (Rowauian Tobacco Monopoly) Hr. Kostic (General Manaser,~DDTN Tobacco Company, ~i|. Yugoslavia) Hr. Taslc (Import/Export Manager, DXN Tobacco Company, His, Yugoslavia) Mr. Nordhammer (Scanex) ~ -- Mr. S. Hashnlkov (Rnula) General Brakov (General Manager, Zil ~ndustrial Complex~ Moscow, Russia) TOTAL 13 SUB-TOTAL 33 • -~- ~ t~t.,,--]. BAT INDUSTRIES CONFIDENTIAL- CATEGORY l: MINNESOTA TOBACCO /... r~ C) r~ r~ hJ -.,,j c) j~ t~J LITIGATrON BAT Industries document for WHO 5 March 1999

-2- NUM3EE CARRIED FOERAED 33 BATCF" Mr. U.G.V. Herter Mr. H-A° TomaC (Board member, YoreiEn Business) Mr. D. Schnadter (Regional Director, Eastern Europe) Hr. C. BehninE (Area Manaser Poland, CSFR, Romania) Mr. R. Duda (Leader of the Polish Team) Mr. F. Rulle (Area Manager, BuIEaria) Mr. W. Kruse (Adviser, YuEoslavla) Dr. G. Oltermaun (Read of Technical Team, Eastern Europe) Hr. J. Siwek (Head of BATCF office in Warsaw, Poland) Mr. M. M/chnfewlcz (Director~ MT Augustow) Mr. M° Pokorny (Prasue) Hr. A. Aleksov (Sofia) Mr. J. Sh~nhuber (Head of Hoscow Office) Mrs. H. Dreskovlc (BATCF ageuC/HagiscraC, Ljubljana, Tusoslavla) Hr. S. Nelkovskl (Director Make~d_Qnla Tabak, Skopje, Yugoslavia) Mr. S.Y. Palitjtschuk--(Read of Ukrtabakp~om, Ukraine) Mr. V. Rodichev (Adviser, Moscow) Hr. O.L. Yason (Director of Pryluki Tobacco Factory, Ukraine) Mr. Y.A. Hikolenko (Head of Cherkassy Tobacco Factory, Ukraine) Mr. R. CouCscharenko (Director HonasCirrieka Factory, Ukraine) TOTAL 20 Sonza Cruz Mr. A. Monceiro de Castro Mr. F. de Andrade Mr. K. ~arrloc TOTAL 3 Adminiscraclon/Incerpreters Dr. R. Salter Hies W. Black Mr. E. Javor (Pets, Sales P.anager) Joseph (Pecs, Public Affairs) TOTAL 4 CXAND TOTAL 60 RSIDJS 19Oh February 1992 BAT INDUSTRIES CONFIDENTIAL- CATEGORY !: MINNESOTA TOBACCO LITIGATION r~ r~J P,o r',o --.4 o BAT Industries document for WHO 5 March 1999

SOUZA CRUZ GROUP EASTERN EUROPE FEBRUARY 26~h, 1992 RESTRICTED 3°a ZHTRODUCTIOH During the second half 1991 Souza Cruz carried out an evaluation of the key Eastern European markets and, at the same time, continued to seek alternatives to consolidate . its brands in Poland. This evaluation has shown that Hollywood has considerable potential in the growing value for money segment of these markets. In order to meet the challen~e of marketing its key brands in this area, Souza Cruz has dec~ded to revise its Export Department's,, structure by forming an Eastern European Group,based in Hamburg, U consisting of an Area Manager and two Terrltory Managers. Tn addition, another Group, based in Cyprus, will be responsible for the operations in Rumania and Bulgaria, consisting of an Area [( 'Manager and a Territory Manager. Through the overseas structure, Souza.Cruz will improve it's end market information and data base, and, also ClOSely mon.lnor all relevant changes in the area which could affect its buslness. Souza Cruz will continue to maintain close cooperation with BAT CF. POLAND D~WDmm IHTRODUCTZOH nmmm With a total market of approximately, 95 billion cigarettes,Poland remains a key market in Souza Cruz's Eastern European plans. It is estimated that the imported brand segment of this market reached volumes in excess o~ 10 billion pleces" in 1991, which includes re-exports to neighbouring countries, mainly Russia, and was largely dond~ated by NDP channels. ., O CD BAT INDUSTRIES CONFIDENTIAL- CATEGORY I: MINNESOTA TOBACCO LITIGATION BAT Industries document for WHO 5 March 1999

2 Pre~..um brands, such as Marlboro and Camel, represented a conslo.erable par~ of the total. How. ever,, the medium and low price segments are ee:~ma:ea =9 nave naa a n%gner growth rate through brands such as Golden American (Rothmans}, LM (PM) and Montecarlo (~Tal. The constant political and economic changes observed in Poland have greatly affected the cigarette market. Due to this country's need to improve tax revenue, the Government has taken a series of actions to control NDP imports which have, since January, greatly reduced volumes imported through this channel. However, due to consld?ra~le stocks, ttill avail~ple in the market at NDP prices ano une ~acK oz aezln~tion concerning long term eficiency of this control, it Is still not possible.to establish DP operations. Recently, the Government has also co,sldered re-establishing state controlled monopoly for cigarette imports. he tendency observed during 1991 of joint venture/licensing omesulc, pr?uu~.lon has also been affected by Government changes. ne prlvatlza~lon of certain strategic industries, tobacco included, is being reviewed and the return of a state monopoly for this indusury is being considered. Souza C~Iz volumes (millions} and share (%) in this market,to date, are~ 1990 1991 HOLLYWOOD vol 27 188 share 0,03 0,20 STRATEGY a) Overall: Closely monitor all changes and Government actions which could affect the cigarette market. In order to be prepared for shifts in tendencies, close contacts will be maintalned with potential DP and NDP operators. Special attention will be given to the former state monopoly of tobacco imports (Agros). b) Portfolio: Souza Cruz will continue to concentrate efforts in Hollywood. The brand has shown good potential and will continue to be positioned a~e the value for mgney segment where LM (PM) and Montecarlo (RJR) the main competitors. ~o " O 0 BAT INDUSTRIES CONFIDENTIAL- CATEGORY I: MINNESOTA TOBACCO LITIGATION BAT Industries document for WHO 5 March 1999

3 c} Distrlb.ti0n: ~w~m~m~mm~m Even though there sre a lot of indefinltions in the market, Souza Cruz will intensify contacts and negotiations with private NDP traders. Considering the difficult~ of establishin~ contact with this type of trader, Souza Cruz wi11 participate in fairs and exhibitions making itself available for contacts. The main requirement for. this channel is prompt delivery of merchandise. This problem wi11 be solved by April 1992 with stocks of Hollywood being held in a European bonded wharehouse (Hamburg}. P~o~zc'~v v~ (MZLLZOn) ~ SSA~S (t) 1992 HOLLYWOOD vol 300,0 share 0,32 RUMANZA ZIP~RODUCTI~ This 30 billion cigarette market is showing considerable potential for imported brands due to the bad c?nditions of the domestic industry (shortfall and very low qual~ty brands). Bowever, ~ne poor state of the economy andlow purchase ~ower indicate that the demand will be concentrated in the low prlce segment. Presently, the main competitors in thi8 segment are Montecarlo (R/R), LM (PM| and Assos (Papastratos). There is a very strong Middle East connection in Rumaniah cigarette a~port8. The operation is DP with internal tax and exchange rate loopholes aria is largely controlled by Lebanese and Syrlantraders. This connection stimulated and developed ex-Cypru8 operations. P~ ?o P~ O BAT INDUSTRIES CONFIDENTIAL- CATEGORY l: MINNESOTA TOBACCO LITIGATION BAT Industries document for WHO 5 March 1999

4 8ouza Cruz has decided to enter Rumania through Kental's recent expansion in this market. An initial shipment of 45 million Bollywood has been made through Cyprus (December 91) and a second delivery of 30 million should ~e made in February, also from Cyprus. STRATEGY m~mmmm~ With the appointment of a Territory Manager in March 92, Souza Cruz will ~rove its knowledge of this market, developing specific Marketing and Distribution Plans, aiming to ¢onsolidate this operation and concentrating efforts on Hollywood. In addition to this, Souza Cruz will create 6pecific stocks logistics in order to guarantee direct supply to this market, separating it from other ex Cyprus operations. BULGARIA ZFJ~RODUCTZOli With a total market of, approximately, 18 billion cigarettes, Bulgaria has the most developed tobacco industry of Eastern Europe. The state monopoly Bulgartabac is one of the most important industries in the country, dominating the domestic market. It is also one of the largest cigarette exporters in the world. In the r.ecent past the international brand segment was exploited through llcense agreements and hard currency outlets. However, private trade channels have been expanding, in similar conditions to Rumania, i.e., Middle East connections exploring loopholes an the tax systems. Even though ~his operation has a smaller scale when compared to Rumania, ex Cyprus exports are already being developed. STRATEGY Considering the difficulties in entering this market through existing channels, Souza Cruz will stimulate and monitor Kental's development in this market. , CD CD BAT INDUSTRIES CONFIDENTIAL- CATEGORY l: MINNESOTA TOBACCO LITIGATION BAT Industries document for WHO 5 March 1999

CZS ~ ILEPU~ZC8 m ~m ~ ZIN~RODUCTZON The former USSR continues to present a shortfall in excess of i00 billion cigarettes for a total market of 435 billion pieces. This gap and the strong demand for the l?w price segmen_t makes the CZS and Republic Souza Cruz's main priority in ~as~ern zurope. However, lack of hard currency and payment conditions still remain a problem for trade in t~Lis market, which is asravated by the desestabilization taking place in the country. STRETEGT Souza Cruz will continue to contact traders with conditions for direct deals (barter). Indirect trade through Poland, Rumania and Afghanistan will also be sought. Special efforts and support will be given to the Group's centralized negotiation with ROSVNESHTORG. REMAINZHG OF EASTERN EUROPE As a consequence of the trade experience acquired in the already exploited markets of Eastern Europe, it is reasonable to project, a considerable business potential in Hungary, Czechoslovakia, Yugoslavia, Slovenia, Croatia and Albania. More profound analysis will be carried out to i}egtify trade opportunities and existing bilateral, aavan~a~es mecween ~n?s? countries and Brazil are currently beuq stud~ed. Contacts w~th traders and visits to these markets are 5eing held to monltor the situation and, if possible, to ~nitiate sales-operations. PROJECTED VOL~NE (NILLIOHS) EASTZRS EUROPZ (EICLUDING POL.Mi'D) 1992. HOLLYWOOD 1.000,0 -- // -- MTEm~2 PE1064 19102192 BAT INDUSTRIES CONFIDENTIAL- CATEGORY I: MINNESOTA TOBACCO LITIGATION C) .,P r,J r,J P,.) -..j c~ BAT Industries document for WHO 5 March 1999