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R. J. REYNOLDS TOBACCO COMPANY STATE GOVERNMENT RELATIONS LEGISLATIVE COUNSEL BRIEFING BOOK 1990-91

• R. J. REYNOLDS TOBACCO COMPANY STATE GOVERNMENT RELATIONS ~ LEGISLATIVE COUNSEL BRIEFING BOOK 1990-91

• INDEX I. The Tobacco Industry A. Economic Impact • Growers -- Tobacco Family B. Industry Trends • Sales Status -- Domestic And International C. Cigarette Manufacturing • Companies, Subsidiaries, Locations, Market Share II. RJR Nabisco, Inc. A. RJR Nabisco, Inc. B. Company Products 1. R.J. Reynolds Tobacco Company 2. Nabisco Brands, Inc. 3. Planters LifeSavers Company III. RJRT State Government Relations • A. Mission Statement B. Organization Chart C. Regional Directors and States D. Programs • Legislative Counsel • State Events Programs • Political Contributions • Honorariums • Charitable Contributions E. Resources 1. Internal • Public Issues • Internal Departments • Sports Marketing • Products 2. External • State Business Organizations • Legislative Organizations • Tobacco Organizations on 0 ~ ~ . ~ ~ ~ (0 N

• • IV. The Tobacco Institute A. Description • Mission • Member Companies • Policy Direction B. State Activities Division • Mission • Organizational Charts • Map • List of Employees C. Legislative Counsel • State • Local D. Major State Legislative Support Programs • Labor • Environmental Tobacco Smoke/IAQ Experts • Economist Programs • Information and Publications • Fire Service Organizations • Workplace Smoking: Legal and "Social Costs" Experts • Advertising/Sampling E. Pro-Active Programs V. RJRT Issues A. Environmental Issues B. Tort Reform C. Marketing D. Packaging E. Technology F. Toxic Substances G. Preemption/Federal VI. Tobacco Industry Issues A. Excise Taxation B. Marketing Restrictions C. Smoking Restrictions D. Fire Safe E. Tobacco Liability/Reckless Endangerment F. Death Certificates G. Environmental Tobacco Smoke/EPA H. Ballot Initiatives/Referenda 0 cn _ J VII. Agenda -- Tobacco Free America (0 ~ cn w

• POCKET MATERIALS FRONT POCKET • RJRT Reporting Requirements: Lobbying, Grassroots & Contribution Expenses BACK POCKET • State Cigarette Excise Tax Rates (July 1990) • Smoking Restrictions (July 1990) • •

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• A. ECONOMIC IIVIPACT The United States is the largest exporter of tobacco and tobacco products (cigarettes, cigars, snuff, and chewing and smoking tobacco) in the world, and the second largest tobacco producer (behind China). Tobacco is the nation's sixth largest cash crop, behind corn, soybeans, hay of all kinds, wheat and cotton. In 1989, American consumers spent $40.4 billion on tobacco products, a record high and an increase of more than $2.6 billion over 1988. More than $38.3 billion, or 95 percent of the money spent on tobacco products, was for cigarettes. A recent Price Waterhouse study estimates that the tobacco industry's spending-induced impact on America's GNP in 1986 was $59.9 billion -- far more than expenditures on tobacco products alone. Several types of tobacco (flue-cured, burley, Southern Maryland, fire-cured, dark air- cured and all cigar types) are grown on farms in 16 states and in Puerto Rico. Approximately 130,000 people are employed in the growing of tobacco throughout the United States. Tobacco growers, warehousers, manufacturers, wholesalers and retailers in 1986 numbered 422,462. In addition, the supply sector -- industries that produce and distribute goods and services that are used as inputs in the production and distribution of cigarettes and other tobacco products -- totaled 278,421. Since 1863, when cigarettes were added to the tobacco products taxed by the federal government, governments at all levels have collected over $213.3 billion in tobacco taxes. Cigarettes have accounted for 95.9 percent of that, or $204.4 billion. In fiscal year 1989 taxes on cigarettes and other tobacco products totaled nearly $11 billion. States collected $5.2 billion in excise taxes and $1.4 billion in sales taxes on all tobacco products. Cigarette taxes comprised approximately 99 percent of the total tobacco taxes collected. B. INDUSTRY TRENDS Domestic United States cigarette production is estimated to be down approximately 2.9 percent from last year. In 1989, factories in the U.S. produced 675 billion cigarettes. Total U.S. consumption, including overseas armed forces, was .533 billion cigarettes. Per capita U.S. cigarette consumption, based on population 18 and over, declined to 2,936 from a record high of 4,345 in 1963. The acreage harvested, however, was 683,500, up 8 percent from 1988. International • The U.S. is the leading exporter and importer of tobacco. Approximately 360 billion cigarettes are presently exported to 109 countries. In September 1990, RJRT International reached an agreement with the Soviet Union to ship 14 billion cigarettes by September 1991. Presently, RJRT International sells about 101 billion cigarettes overseas.

. C. CIGARETTE MANUFACTURING Listed below are the six major cigarette manufacturers in the United States. • Comnanv Market Share Subsidiaries Philip Morris Companies, Inc. 120 Park Avenue New York, NY 10017 (major presence in Richmond, VA) R J. Reynolds Tobacco Co. 401 N. Main Street Winston-Salem, NC 27102 Brown & Williamson 1500 Brown & Williamson Tower P.O. Box 35090 Louisville, KY 40202 Lorillard, Inc. One Park Avenue New York, NY 10016 The American Tobacco Company Six Stanford Forum P.O. Box 10380 Stanford, CT 06904 LJggett & Myers Tobacco Company, Ina 300 North Duke Street P.O. Box 1572 Durham, NC 27702 40.2% 31.6% 10.1% 6.7% 7.4% 4.1% General Foods Corp., Miller Brewing Co., Kraft Foods, Oscar Mayer Foods Corp., Birds Eye, Inc. Subsidiary of RJR Nabisco, Inc., whose other subsidiaries include Nabisco Brands, Inc., Planters + LifeSavers Company Subsidiary of BATtJS, Inc., whose other subsidiaries include Saks Fifth Avenue, Marshall Fields, Appleton Paper, and the Farmers Group Subsidiary of Loews Corp., whose principal owner is CBS News executive Lawrence A. Tisch and whose other subsidiaries include CNA Financial Corp. and Bulova Corp. A subsidiary of American Brands, Inc., whose other subsidiaries include Jim Beam Brands Co., Master Lock Co., Titleist Japan, Inc. and a variety of office equipment/products (e_.g, Day- Timers, Inc., Swingline, Inc.). Subsidiary of Liggett Group, a subsidiary of L. Holdings, Inc. and B.S. LeBow, Inc.

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