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0 PICK YOUR 0 Regular and Menthol 100's in Box, Soft and Slims,

004 ADVERTISING SUPPORT OUTDOOR r Millions of targeted Impressions. Support begins February 1. • 30 sheet billboards • Permanent bulletins PRINT •Combination of weekly and monthly ma azines wiii reach 78% of women smokers age 21-40 seven times. The magazine list includes: TV Guide People National Enquirer Star Globe National Examiner Soap Opera Digest Soap Opera Weekly Woman s World ltve Story

0 . November 18, 1991 TO: Mr. J. W. Johnston FROM: Mr. L. A. Sasso RE: BUSINESS INTELLIGENCE REPORT PHILIP MORRIS • COLLECTOR'S CHOICE UPDATE - We have confirmed shipments to New York, Los Angeles, and Washington. All ten brands are King Size Box; however, pricing is the same as 100MM. Philip Morris may introduce additional brands/series as they have filed trademark applications for "Studio Series" and "Gallery Series." While this may only be a program to maintain trademarks, the case packing and display/merchandising concepts are quite creative and could have an impact if utilized for other brands. Attachment I • SMOKE FREE CIGARETTES - Philip Morris received a patent for an electric cigarette that comes with a replaceable tobacco cartridge that would be controlled by -a push-button. Attachment II • TOBACCO INDUSTRY TRADE COUNCIL - Philip Morris formed this council "to provide a forum in which the company and its customers can meet to discuss, anticipate, and resolve a variety of issues facing the tobacco industry." The first meeting will be held in New York in December. Sources report that PM has al so met with the New York State Association of Candy and Tobacco Distributors. At the meeting the association requested better credit terms, as well as, payment for participation in trade programs in shares of stock which could not be sold for three years after receipt. • PRE-ASSEMBLED PROMOTIONS - RSM, D. C. Turner, reports that Philip Morris has contacted the Florida State Tax Department to obtain permission to ship promotions with product attached direct from their factories which would not have to be tax stamped. Taxes would be paid directly to the state and would indicate same on the packages. • FAMOUS VALUE BRANDS - Genco Marketing conducted a sweepstakes whereby retailers who were found to be properly pricing and displaying Genco "Eagle" cigarettes could win up to $100.00. Attachment 111. Additionally, several reports have been received from the field indicating substantially greater distribution of FVB, to include Eagles, Shield, and Knight brands. • FAMOUS VALUE BRANDS PRICE INCREASE - In an effort to determine how much, if any, of their recent 80t per carton price increase will be returned in the form of increased off invoice or quarterly allowances, the field reports through customer contacts that Philip Morris has not made a decision. They may be waiting to see what we will do.

4 , J. H. ROBERTSON BIAD - B1 REY BUSINESS INTELLIGENCE REPORT I

Mr. J. W. Johnston Page 2 LORILLARD • STYLE UPDATE - Of the six styles, only four will be introduced nationally; the two slims styles will only be introduced in markets with a high sub- generic development index. Their promotion support will also vary by market i.e., high index - 20t pack and $1.50 carton coupons, low index - 15t pack and $1.00 carton coupons. They will work permanent displays paying $20 per month for a 72 pack self-service counter display, $7.50 per month for a nonself-service display. Attachment IV, high development. Attachment V, low development. • SPRING LEMON LIGHTS - Lorillard will once again test this brand in two styles, Full Flavor King and 100 MM. Markets are the state of Delaware and Pittsburgh, PA. First shipping date was November 4, 1991. Direct account introductory allowance is $36.00 per case plus 30-day terms on allocation quantities. We have confirmed that an FSI will run on 12/29 with a free pack coupon. Attachment VI BROWN & WILLIAMSON . WORKFORCE REDUCTION - Sixty-eight Jobs will be cut by early 1992 at their Louisville headquarters from four service functions; mailroom/print-shop, travel-services, advertising materials and the premium operations group. • SMOKE FREE CIGARETTE - A patent has been received for a cigarette with a burning element at the tip which heats air while a flange keeps smoke produced by the burning tip from reaching a person's mouth. Attachment II. AMER A • PRESIDENT AND C.O.O. - Donald S. Johnson was named President and C.O.O. of American Tobacco Company succeeding Charles H. Mullen who retains the titles of Chairman and C.E.O. Attachment VII. • RIVIERA MENTHOL - Full Flavor Box King and 100MM will be introduced at subgeneric price in Wayne County, Michigan, (Detroit) with first shipments on 11/18. Direct Account allowance is $24.00 per allocated case plus a $12.00 per case quarterly allowance. Direct Accounts will be paid $5.00 for assembling and selling a four carton package display. American is recommending that the wholesalers give $1.00 to retailers, $2.00 to their salesman and keep $2.00. Attachment VIII. MISCELLANEOUS • CIGARRERA LA MODERNA - A New York City wholesaler has been given a franchise to sell Fiesta FF Box 85's and Filter 100's in New York.'List price is not known at this time; however, the "fair trade" price to a retailer is 440 pei^ carton less than Best Value. Field reports indicate exceptional sales in Hispanic neighborhoods and that menthol styles will be introduced shortly.

Northeastern University..He also has an M.B.A. from.the University of Southern California. He lives in Shelton, Conn., with his wife, Betty, and their two sons, Brian and Bruce.

The Reynolds cigarette features a highly refined charcoal tip, which can be lit with a match and is surrounded by an insulating jacket. The "barrel" behind the tip contains tobacco as well as an inner core filled with tiny capsules that emit a tobacco -flavored vapor when exposed to a stream of hot air from the charcoal tip. In Premier, these capsules were tiny beads of alumina coated with tobacco and a mixture of water and glycerine that create a vapor when heated. R. J. Reynolds received patent 5,060,666. Brown & Williamson, which makes about a dozen brands of cigarettes including Kool, Raleigh and Viceroy,.patented the simplest of the three approaches. Running through the center of the barrel is a hollow tube that carries hot air and is surrounded by tobacco saturated with a vapor-producing mixture, like glycerine. A burning element inside the tube at the tip heats air in the central tube, while a flange, or hatch, keeps smoke produced by the burning tip from reaching a person's mouth. "To date, consumer interest appears to be minimal," said Patrick Stone, a spokesman for the company. Brown & Williamson received patent 5,060,667.

OR'.S CHOICE® THIS CARTON NOT TO BE SOLD TNE OR DISPLAYED FOR USE AS A PART OF SKYIINE SERIES INTENDED VA 23261 • Made in U•S A ~ choice. Richmond.

Mr. J. W. Johnston. Page 3 MISCELLANEOUS Cont'd • SANTA FE NATURAL TOBACCO CO. UPDATE - The company has been successful in obtaining distribution.of their "chemical-additive-free" cigarettes in Health,.Nutrition and Natural Food stores. Their trade correspondence includes some interesting statements regarding tar and nicotine content. Attachment IX. ew2?t L. A" sso BUSI SS INFORMATION AND ANALYSIS LAS:jd Attachments DEPARTMENT cc: Mr. G. Ainsworth Mr. D. J. Anderson 0 Mr. D. K. Isbister Mr. W. W. Juchatz Mr. A. L. Barnett Mr. R. W. Kauffeld Mr. G. T. Baroody Ms. L. J. Beasley. Mr. J. W. Best Ms. B. J. Kirby Mr. D. A. Krishock Mr. E. M. McAtee Mr. L. Birlin Mr. G. W. McKenna Mr. E. M. Blackmer Mr. P. J. Cundari Dr. G. R. DiMarco Mr. Mr. Mr. D. P. Montgomery, J. R. Moore M. B. Oglesby Jr. Mr. R. E. Evans Mr. E. J. Fackelman Mr. D. B. Fishel Mr. Y. W. Ford, Jr. Mr. J. J. Gangloff Mr. Mr. Mr. Mr. Mr. D. -F. Pearson T. W. Robertson R. M. Sanders L. S. Schreiber J. C. Schroer Dr. J. L. Gemma Mr. L. V. Gerstner Mr. T. C. Griscom Mr. Mr. Mr. J. R. Shostak S. R. Strawsburg J. D..Weber Mr. S. G. Hanes Mr. R. S. Hendrix Mr. D. N. lauco Brand Managers BIAC

PRODUCT • Loriilard introduces new S1YLE, a low-tar 100's brand family, at a subgeneric price. •STYLE offers a fashionable, quality Image that is designed to appeal to adult smokers 21-49 years of age. • STYLE will be available as a full circumference 100's and slims 100's product line. Full circumference 100's will Include lights and menthol products in both soft pack and box. Slims lights 100's will include regular and menthol products in box packs. • All STYLE products are white tipped. 4D STYLE's distinctive package design~ will generate The pack de$i n is maximum im act at point-of-sale. visuall arrestn and gives the productpa unique fashionable look.