Tobacco Documents Online

2639 2168 MICHAEL WATERSON Pet., Ex. 5 12/0207 i0 15 20 25 a group of partners set up some five (5) years ago in Henley-on-Thames. The purpose of the company was to put together detailed statistics covering various industries. The companyproduces figures for the advertising market, for example. Not too fast, Mr. Waterson. The company produces figures covering the advertising markets of the world. It produces figures on the drink industry, and indeed these tables covering the tobacco industry. It also produces documentation on the food industry and a variety of other industries, such as pensions and so on. I'd like you to turn to Table 1 which is headed "Per Capita Tobacco Consumption Trends: National Sources" Now, looking at that table, Mr. Waterson, would you first tell the Court, please, how you came to compile these particular figures and where they come from? I set off to compile the data by trying to find reliable national sources of statistics on the tobacco market in each of the main O.E.C.D. countries. Compilation of international data on any subject is a difficult business because most international statistics, in my experience, are simply compilations of individual national sources. It is very difficult, usually, to find truly international statistics. AUDIOTRANSCRIPT, Division de Pierre Vilaire 8, Associ4s Lt4e

2640 2169 MICHAEL WATERSON Pet., Ex. 5 l0 15 20 Q- 25 To compile, for example, the advertising expenditure figures, the international or European adspend figures that I compile, we have to go to the various national sources that produce national figures before aggregating them into international statistics. The big difficulty is always finding figures which are reasonably comparable and which are accurate and reliable. In most areas, you find market research companies producing data, statistical bureau producing data, trade bodies producing data and publishers producing data of various kinds. The, in my view, the best way to produce reliable international cross-sectional data -- which is what these kinds of reviews are called, they're looking at a cross-section of countries -- is to go to statistical bureau, national statistical bureau, if possible, or trade bodies, and this is what I did in these cases. I have managed to -- I have tried to compile as accurate a series of data on international tobacco consumption, on a reasonably comparable basis, as I was able to do. Okay. Now, just by way of illustration, let's take the first country which appears on Table i, which is the Netherlands. Just to the left of the word AUDIOTRANSCRIPT. Divi,ioo a~ ~i~,~ Vi~o;,. ~. A,~oc~

2641 2170 MICHAEL WATERSON Pet., Ex. 12/0275 5 l0 15 20 25 "Netherlands", there is a number eight (8) which, I think, refers to the next page. A- Yes, it does. Q- And the... A- Number eight (8) on the... Me BAKER: Excuse me, Mr. Irving. My Lord, before Mr. Irving continues this line of questions, I have a problem. The problem is that we were given one set of these charts in August with the original report. I was handed a set of charts, a new set of tables by Mr. Irving in court two (2) weeks ago and hurriedly told what some changes were. We're now told, this morning, that there is a third set of tables -- and I don't know which set of tables he's referring to but, I think, as a matter of courtesy, he would, at very least, have the witness go through and explain what the changes are. THE COURT: I gather he was coming to that. Me BAKER: Well, I'm not interested in the methodology. I don't want to feel that I'm in the middle of a magic act, My Lord, and I say that seriously. Which set of charts is he referring to? AUDIOTRANSCRIPT, Division de Pierre Viloire & Associ~s Lt~e

2642 2171 MICHAEL WATERSON Pet., Ex. i0 15 20 25 Me IRVING: I'm referring to the set of charts I just handed in, My Lord, which I gave to my friend this morning. Me BAKER: It's the changes I'm interested in. Me IRVING: I will come to the differences between the charts originally filed and these in due course, but there are, in fact, very few changes. THE COURT: Well, could you just pinpoint them so that we -- because he may have prepared his questions and... Me BAKER: I certainly have. THE COURT: ...on this and want to follow. Could you have the witness pinpoint which one... Me IRVING: Yes, surely, My Lord. THE COURT: ...and come back later on if you wish, but at least... Me IRVING: Absolutely. THE COURT: ...so that we know which one. AUDIOTRANSCRIPT, Division de Pierre Vilaire & Associ~s Lt4e

2643 2172 MICHAEL WATERSON Pet., Ex. 5 i0 15 2O 25 A- Yes, if I might put forward, first of all, the reasons for the changes. Whenever compiling international data, it isn't a question of taking a shapshot of any one point in time. It's usually a question of gently refining data, looking at the data, cross-checking, cross-analysing the data, to pick up areas where suspicions are aroused, where the data may not be all it seems to be. When -- as in compiling the international advertising expenditure statistics, there is never any one perfect set of data almost by definition. It's a continued -- continuous iterative process whereby we try to arrive more and more exactly at what the real situation is, and that is what I have done with these figures. For example... Me IRVING: Q- No, just a second, can we just -- we'll take them one at a time, Mr. Waterson, if we might. If we look at Table 1 as you have now produced it today, and I'd like to compare that, please, to Table 1 as it is attached to your original report so that we can explain to the Court where the changes are. The first which I had already told Mr. Baker of, I think has to do with Iceland, does it not, Mr. Waterson? A- The first change -- the one (i) change was to do with Iceland and, in fact, the biggest, I believe the biggest AUDIOTRANSCRIPT, o~i,io, d, Pi~.~ V~(o;,~ & Asso¢i~s Lt~e

2644 2173 MICHAEL WATERSON Pet., Ex. 10 15 20 25 change on the table is... Me IRVING: My Lord, just before you go on, Mr. Waterson, before you go on, Mr. Waterson, My Lord, have you got the original set of tables... THE COURT: Well, I have... Me IRVING: ...attached to Mr. Waterson's report? THE COURT: Let me just look if I have the original or the amended one. Me POTTER: You have both, My Lord. The one -- the one attached to the expert's report... Me IRVING: The one attached to the report is the original. Me POTTER: ...is the old one and the one in your hands right now is the new one. Me IRVING: If you look on the original report, the original Table i, My Lord, looking down the column of countries, you will find first Netherlands and Ireland and the U.K., Canada, New Zealand and then Iceland. Do you have that? AUDIOTRANSCRIPT, Division de P}er,e Vi~oire & Associ~, L~'4e

2645 2174 MICHAEL WATERSON Pet., Ex. 5 i0 15 2O 25 THE COURT: Yes, that's the old one, yes? Me IRVING: With the number nine (9) -- pardon? THE COURT: The old one? Me IRVING: Yes. THE COURT: Okay. Me IRVING: So Iceland would be the seventh (7th) -- the sixth (6th) country on that list, and as you will see in the Table 1 which is now filed, it is no longer the sixth (6th) country on the list. It is somewhat further down. Q- Mr. Waterson, why that change? A- The reason was the original figures that were given to the computer operator were supposed to be consumption figures not per capita consumption figures. The computer operator, to make them compatible with the other figures, divided them by the population in Iceland to get what he thought were per capita figures but, in effect, the adjustment had been made twice. So the figures were inaccurate. The figures, the consumption figures should be divided only once by population to get AUDIOTRANSCRIPT, D~v~,~oo de Pierre Vilalre & Associ4s Ll6e

2646 2175 MICHAEL WATERSON Pet., Ex. i0 15 20 25 consumption per capita, obviously, and an error was made in believing they were straightforward consumption figures when they were already per capita figures. So the calculation was done twice instead of once. It is now done correctly and is only -- and the figures are correct. THE COURT: Okay. A- As per capita data. Me IRVING: All right. THE COURT: We have Iceland. A- That is Iceland. Me IRVING: Yes, now Iceland now appears in Table I just below Finland. THE COURT: No, just on the top. You have... Me IRVING: It is now the tenth (10th) country on the list instead of the sixth (6th). And as you'll see, the numbers are not the same. Q- Now, staying on Table i, Mr. Waterson... Looking at the original, My Lord, as you go down on AUDIOTRANSCRIPT, Division de Pierre Vilalre & Associ4s L~'4e

2647 2176 MICHAEL WATERSON Pet., Ex. i0 15 20 25 the left-hand side, you come to Norway, with the notation twenty-eight (28) beside it, and if you will look along that -- the row for Norway, you will see that the last year for which data is given is nineteen eighty-six (1986). If you will now look at the revised version of Table i. THE COURT: Okay. Me IRVING: Norway, twenty-eight (28), you will see that there is data now right through to nineteen eighty-seven (1987) and that the number originally shown for nineteen seventy-five (1975), which happens to be two zero five zero (2050), now appears for nineteen seventy-six (1976) and, in fact, all the numbers have been moved one (i) year to the right and there is a new figure for nineteen seventy-five (1975). That is the change I will ask Mr. Waterson to explain why it was made. One, I'm sure, that my friend and Your Lordship see what it is. A- The reason... Q- Mr. Waterson, why was that change made? A- The change was made because the -- those particular figures for Norway are fiscal year figures so they span both nineteen eighty-six (1986) and nineteen eighty-seven (1987). They could be, in theory, AUDIOTRANSCRIPT, Divis;on de Pierre Vilal,e & Associgs L~'~e

2648 2177 MICHAEL WATERSON Pet., Ex. 5 i0 15 2O 25 allocated to either year when you have to make national, annual comparisons of this kind. In order to avoid the charge that we were putting the figures in the most favorable position for our case, we put them in the most unfavorable position, and if you look at the figures having reallocated the dates for nineteen eighty-seven (1987), it has made a difference. It has actually increased the fall shown for Norway to the position which is least favorable to our case. We will be coming to this in a moment, My Lord, and I'm sure my friend won't mind my saying that Norway's an ad-ban country. THE COURT: On the first page? Me IRVING: No, that's Table i. Table i? THE COURT: Why are there many Norways? Are there any other changes on Many different figures have been There are different sources... Okay. ...for Norwegian data. quoted in various forums and I simply... So you'll come back later. AUDIOTRANSCRIPT, Division de Pierre Vilaire & Asso¢igs bee