Tobacco Documents Online

896 361 2. 3. 4. LIST OF OBJECTIONS Objection ................. Objection ................. Objection ................. Objection ................. 427 428 451 459 AUDIOTRANSCRIPT, D~,,i,~oo de Pierre Vilaire & Associ~s Lt4e

897 362 LIST OF UNDERTAKINGS Provide audited financial statements from 1976 through 1987 .......... Determine whether Petitioner ever ran a series of ads called "Smoke Smart" .... 466 490 AUDIOTRANSCRIPT, Division de Pierre Vilaire & Associ4s L,4e

898 363 i0 15 In the year of Our Lord nineteen hundred and eighty-nine (1989), on this twenty-seventh (27th) day of the month of September, PERSONALLY CAME AND APPEARED: Me COLIN K. IRVING: Pour la requ~rante RJR-Macdonald, Colin Irving et Georges Thibaudeau. Me SIMON V. POTTER: Et pour la requ~rante Imperial, Simon Potter, Lyndon Barnes, Pierre Bienvenu et Greg Bordan. Me ROGER E. BAKER, Q.C.: Pour l'intim~ le Procureur g~n~ral du Canada, Roger Baker, Lise Tremblay, Claude Joyal et James Mabbutt. AUDIOTRANSCRIPT, Division de Pierr~ Vilaire & Associ4s Lt~e

899 364 5 i0 A- 15 Q- A- Q- 20 A- Q- 25 A- In the year of Our Lord nineteen hundred and eighty-nine (1989), on this twenty-seventh (27th) day of the month of September, PERSONALLY CAME AND APPEARED: PETER HOULT, WHO, having been duly sworn on the Holy Bible, doth depose and say as follows: CROSS-EXAMINATION BY Me ROGER E. BAKER, Q.C., for Respondent: Q- Do you recall, Mr. Hoult, you were talking yesterday about information in the advertising? Yes. Do you distinguish in respect of information between new brands and existing brands? Well, in that new brands frequently have the descriptor "New", yes. "New"? Yes. So, that would be the most unique way, in your company's advertising, of giving information in a new advertisement or in an advertisement for a new brand, is that correct, by calling it "new"? Yes, or some word which is the equivalent of "new". AUDIOTRANSCRIPT, Division de Pierre Viloire

900 365 i0 15 20 25 Hm, hm. And that is supposed to be information on which the consumer would relate to and deal with and perhaps act on it? Yes. And apart from describing something as new, in a general sense if you might, could you tell the Court what other kinds of things you do in respect of new brands, the advertising of new brands? Well, a new brand usually but not always would focus upon the packaging, and the packaging would be very strongly illustrated so that the potential consumer or purchaser of that would recognize that brand. Focus on the packaging? Yes. What do you mean by "focus on the packaging"? Well, the packaging would be well illustrated, it would be normally large, the packaging, of course, being the most recognizable element of a new brand, at least initially and until the smoker had tried the cigarette. Is that information? Do you actually mean to say that illustrating the package is information? Oh, it's very important information, yes. You mean the color of the package is important information? I mean the color of the packaging and the name of the AUDIOTRANSCRIPT, Division de Pierre Vilaire & Associ~s Ll~e

901 366 10 15 2O 25 brand... I'm talking about the packaging per se. Yes. Leave the name out for a moment, please, Mr. Hoult. No, but the name is part of the packaging. I see. All right. So would you give us an example? An example of a new brand advertisement? Yes. Well... An illustration of what you've just said. If we were introducing a line extension to the Export family -- and I remember very clearly,-when I first came to Canada in nineteen seventy-nine (1979), the first new brand I introduced was Export "A" Medium, which was a blue package. It was introduced about four (4) months after I joined the company. The whole advertisement was essentially the pack, the descriptor "New" was there, we were very keen to communicate that this was a line extension, the pack looked exactly like the parent, except it was blue rather than green. Exactly like the parent, except that -- I beg your pardon? Except that it was blue rather than green. The package? The package. AUDIOTRANSCRIPT, Division de Pierre Viloire & Associ~, Lt~e

902 367 i0 15 20 25 THE COURT: Q- Would you refresh my memory as to what is a line extension new product? A- Yes. I was referring, My Lord, earlier in my testimony, to families of brands. And families of brands usually start with one when it's a successful brand. And as consumer tastes and wants change over time, you would capitalize on the name of the parent, like Export, and you would introduce new brands which were clearly intended to benefit from the heritage of the parent but add something new, whether it be lower tar and nicotine, lightness or mildness or length. And these are called They're extensions from the main line extensions. family line. Me BAKER: Q- In your experience, Mr. Hoult, in the Canadian cigarette market, would you say that the three (3) major companies, really the three (3) only companies that produce cigarettes in this country, that is to say Imperial, RJR and Rothmans Benson & Hedges, tend to advertise in somewhat the same fashion? In general terms, yes. In general terms, yes. And of course, it's part of your company's practice and after your own as a marketing, as a former marketing vice-president, to look at the other AUDIOTRANSCRIPT, Division 4, Pierre Vilalre & Associ~s Lt~e

903 368 i0 15 2O 25 companfes as to see what they're doing and to see how their brands are doing and to track things of that nature? Would that be fair to say? A- Yes, we do. Q- Mr. Hoult, I'm going to show you a December, nineteen eighty-eight (1988), copy of Montreal Magazine. Me IRVING: Are we to look at the cover? Me BAKER: My Lord, before I put these documents to the witness, I would like to show you the magazines, so you'll understand what we're doing. And it will be three (3) ads appearing where there are yellow tabs. THE COURT: Do you have an objection to make? Me IRVING: My Lord, I was simply going to observe, as you will notice, that those are not RJR-Macdonald ads. If my friend wishes, given Mr. Hoult's qualifications, to ask opinion evidence, I don't object. Me BAKER: Q- Now, Mr. Hoult, I am opening this magazine. Just inside the front cover, you will see a fold-out of what appears to be a zebra across the three (3) frames, stamped on which you see the words "Benson & Hedges". And at the AUDIOTRANSCRIPT, Division de Pierre Vilaire & Associ~s Lt~e

904 369 Am i0 A- Q- 15 A- 20 Q- 25 bottom, you see the warning of the Department of Health Do you see that? and Welfare. I do. Hm, hm. From your experience in the cigarette industry, would you take that to be an advertisement for cigarettes, Mr. Hoult? I know it's an advertisement for cigarettes from my experience in the industry. Are you asking me... Address yourself to the Judge, please. I know that's an advertisement for cigarettes because I know the name Benson & Hedges. Thank you. Now, could you look at that advertisement, please, and tell the Court what information is in that advertisement? I think that is a very poor ad because I think the amount of information is minimal. The only information I see in that ad is Benson & Hedges, the name, and of course the health warning. We have evaluated this ad and I am aware that its effectiveness is very low, for reasons that I've intimated earlier: the amount of information on it is both low and ineffective. Hm, hm. So you don't think they would have evaluated it -- of course, I'm asking you to speculate -- the way you... AUDIOTRANSCRIPT, Division de Pierre Vilaire & Associ4s [t4e

905 370 i0 15 20 25 THE COURT: Well, don't you think that's not the proper witness to testify on a Benson & Hedges ad? I mean to what -- what probative value would that have? Me BAKER: My Lord, this man is one of the senior tobacco executives in the world. With respect, I think his views on either his own company's ads or other companies ads are of extreme importance for you to appreciate what it is that these companies do with their advertising. THE COURT: Well, I think what's important to me is what they do in RJR with their advertisement, and we will see what Imperial Tobacco, what they do. But I mean, how can he comment on what Benson & Hedges wanted to do with that, unless to speculate that they were trying to get some market and try to seduce somebody by some imagery? But apart from that, I mean he hasn't been privy to the conception of that ad. Me BAKER: With great respect to you, My Lord, if Mr. Hoult is not an appropriate person to analyze an ad for Your Lordship, how then can we expect the consumer who is looking at that ad, or any other company's ads, his company's or any of the other company's, to appreciate AUDIOTI~ANSCI~IPT, D~v~ioo ae Pierre