Tobacco Documents Online

2960 2492 MICHAEL WATERSON, Pet., Cr. Ex. i0 15 11/016620 25 Now, what I want you to tell the Court is what you meant when you told the House of Commons on the nineteenth. (19th) of January, nineteen eighty-eight (1988), at page twenty thirty-six (2036), when you were asked by a Mr. Brightwell, a Member of Parliament, who was wondering about the effects of banning advertising in Norway and England, and he wasn't sure if the right demographics were looked at, so he asked you, for instance, did you study the population that would be liable to buy cigarettes. The population over fifteen (15), I understand, is where you would look. Did you study the taxes, how they'd increased, the relative price of cigarettes and the real cost in terms of hours of work to buy a package of cigarettes. His question to you really was: were these built into your studies and into your critique? And your answer was: "I have not personally done any detailed work on the tobacco market." That is correct. Now, what did you mean? I meant that I had undertaken these cross-sectional surveys. I had looked at tobacco consumption in various countries, but I had not attempted to look in great detail at the factors affecting smoking in any one country because that would be quite beyond my resources

2961 2493 MICHAEL WATERSON, Pet., Cr. Ex. 5 i0 15 20 25 Qm Am and my time. I'd like you to turn to Table 3 and 4 in your Exhibit RJR-26. I have it. Have them? Now, Table 3 appears to be derived from Maxwell Research Estimates. That is correct. Who are they? This is a research company that, for many years, has provided the tobacco industry with estimates of market size in the tobacco field. Are they independent or -- is that an American operation or United Kingdom or what are they? It's an American operation. Are they owned in whole or in part by the tobacco companies, do you know? I'm afraid I don't know their ownership details. You don't know if they're independent then? I don't. I do know that cigarette companies all over the world use their data on a day to day basis. If the data was supplied by an organization or controlled by any one of the tobacco companies, I think it unlikely that the -- I think had any one of the individual tobacco companies controlled the Maxwell Consulting Company, it would be unlikely that the others would buy AUDIOTRANSCRIPT, Division de Pierre Vilaire & A,sociEs LtEe

2962 2494 MICHAEL WATERSON, Pet., Cr. Ex. 11/0251 I0 Q- A- 15 20 Q- 25 data from it. So I would assume that it was independent of any one tobacco company. I see. And Table #4 derives from where? This is Tobacco Merchants of the U.S. Right. That sounds pretty serious like a tobacco operation. Are they controlled -- is this little operation controlled by the tobacco companies in the United States? That is certainly an operation controlled by the tobacco companies in the U.S., I would imagine. I see. You would imagine. So you would think that the tobacco -- other -- that tobacco companies might not find it reliable? No, but I would imagine it is a trade body set up by all of the tobacco companies or many of the tobacco companies or some of the tobacco companies to provide estimates which they could collectively use. I don't believe -- I really cannot say for sure, but I believe Maxwell to be a research, a market research company and I don't think controlled by the tobacco industry. The Tobacco Merchants of the U.S., I am sure, is some sort of trade body collectively owned by the tobacco industry. Now, when you look at Tables 3 and 4 to the bottom row. Now, the bottom row in Tables 3 and 4 is sort of similar AUDIOTRANSCRIPT, Division de Pierre Vilaire & Associ~s L,~e

2963 i0 15 20 25 AD Qm Am 2495 MICHAEL WATERSON, Pet., Cr. Ex. to row seventeen (17) in Table i; right? Right. Now, are the data on Tables 3 and 4 specifically noted to be cigarette consumption per capita? They are cigarette consumption per capita. How do you know that? Because it says here on this table and I would assume that is correct. When you say, "here on this table," the Court doesn't know what you're talking about. I'm sorry. On the -- on my testimony, Table 3, it says, "Source 2: Maxwell Research estimates, cigarette consumption per capita." Okay. And what about Table 4? If I could just check that against the revised version to be absolutely certain. It says, "consumption of cigarette sticks per capita," which is the same thing. Table 4: cigarette consumption per capita which I've revised in the final version to cigarette consumption sticks per capita to make it absolutely clear. Same thing. Same thing. Right. They don't indicate, Tables 3 and 4, whether it's roll-your-own cigarettes or not? AUDIOTRANSCRIPT, Division de Pierre Vilalre & Associ~s Lt~e

2964 2496 MICHAEL WATERSON, Pet., Cr. Ex. i0 15 20 25 AD This would be manufactured cigarettes per capita. So, the Maxwell Research Table and the -- which is Table 3, and the Tobacco Merchant's Table, which is Table 4 both in the third -- or the bottom line for Norway? Yes. In the former, being Table 3, showing an increase of fifty-two point eighty-three (53.83) and in the latter, Table 4, for Norway at the bottom showing an increase of forty-seven point fifty-nine (47.59) do not include... They're most unlikely to include roll-your-own. I beg your pardon? I believe they do not include roll-your-own. They are... They do not include... ...simply manufactured cigarettes. Because it just looks too high, right? It is too high to be... Yes. ...a total figure. Right. Now, if we go back to Table i, your Table i? Yes. And look at row five (5) for Norway. Do you see it? I see it. That's the one that shows the real decrease of four point nine zero percent (4.90%)? AUDIOTRANSCRIPT, Division de Pierre Vilaire & Associ4s L/4e

2965 2497 MICHAEL WATERSON, Pet., Cr. Ex. I0 15 2O 25 Am Yes, I see it. M'hm. Now, that definitely includes roll-your-own, doesn't it? That definitely includes roll-your-own. And we know that because it says so in the sources at the bottom, right? It says so in the source at the bottom and I believe that line will be replicated in the -- in the latest version. If I would just check Reference 5... Yes, I think it includes roll-your-own. It definitely includes roll-your-own. Good. Now, when you compute consumption per capita, divide the total consumption by the total population? Unless otherwise specified, yes. Now, let's see if we understand that. Table I says per capita, Table -- Table i, I'm sorry, shows per capita tobacco consumption as a -- as I say, as an overall heading. I was just talking about how you compute it? I'm sorry, per capita figures, you either divide by... But when you compute consumption per capita, you do it -- take the total consumption and you divide it by the total population? Or alternatively by the population aged. fifteen (15) or over. AUDIOTRANSCRIPT, Division de Pie~e Vilaire & Associ4s Lt4e

2966 2498 MICHAEL WATERSON, Pet., Cr. Ex. 5 i0 15 20 25 Well, we'll get to -- we're going to get to that. Now, did the primary sources in the notes to Table 1 contain actual per capita consumption estimates or did they contain total consumption... The table upon... ...which you and then the people from M. H. Gamma had to convert into per capita units? The people from M. H. Gamma did not convert anything. The figures were all... They didn't? The figures were all converted by Allied Information Technologies not by M. H. Gamma. Not by Infotab either? And not by Infotab either. Okay. So you people did it all? Yes. Right. Well, what did you do? We took the consumption figures, the raw consumption figures, unless the per capita figures were already calculated. We took -- so there are a set of tables which -- upon which these are based which are simply headed Consumption Tables. These are the raw consumption figures. They were then divided by the population estimates as and where appropriate if not already in that form. For example, I believe the AUDIOTRANSCRIPT, o~,ioo a~ Pierre VlIoire ~ Assod~s Lt~e

2967 2499 MICHAEL WATERSON, Pet., Cr. Ex. i0 15 20 25 Icelandic figures came already in a per capita form. Q- Form, I see. So, if you look at note 4? A- Yes. Q- To Table I, not source form, note form. "All population data is from O.E.C.D. Historical Statistics in nineteen sixty (1960) to nineteen eighty-seven (1987)." Does that suggest to you that a lot of it didn't come to you per capita created, at it were, and did you have to do the division yourself? A- I'm sorry, we're talking about Table 4 now? Q- No, we're talking about note 4 to Table i? THE COURT: Table? A- I have -- I have Source 4, I don't have a note 4 in this statement. Me BAKER: Q- I have a note 4 on mine. A- I'm sorry, note at the bottom "all population data", I'm terribly sorry. Q- It's all right. A- I'm misreading it. All population data is from O.E.C.D. Historical Statistics, yes. The calculations in many cases were done by Allied Information Technologies because the raw data was not in per capita form. AUDIOTRANSCRIPT, Division de Pierre Vilalre & Associ4s Lt4e

2968 2500 MICHAEL WATERSON, Pet., Cr. Ex. IO 15 20 25 Q- So, for -- yes. So, there -- you had to some arithmetic yourselves, right? A- That's right. Q- Right, okay. Now, when you did the arithmetical computations, did you use total population or population aged fifteen (15) years or more? A- It is specified where it is used as fifteen (15) or more and specified where it's simply total population. Q- All right. Now, so for row twenty-eight (28), on Table I? A- Yes. Q- Did you use the population aged fifteen (15) years or more? A- I would presume that was calculated from O.E.C.D. Historical Statistics or from -- unless it came in that form from the Norwegian Customs and Excise Directorate. THE COURT: Maybe if you could refer to the 26A, you'll know. Look at your revised one. A- All population data are from O.E.C.D. Historical Statistics except in sources four (4), nine (9) and twenty-eight (28) which are given as supplied. Me BAKER: Q- Excuse me. You have your left hand on something, what is it you... AUDIOTRANSCRIPT, D~i,~o. ~ Pierre V~laire ~, Associ~s Lt~e

2969 2501 MICHAEL WATERSON, Pet., Cr. Ex. l0 15 20 25 This is the... That's 26A? This is the new -- this is the revised set of figures which were given to you by Mr. Irving. Me POTTER: That's Exhibit RJR-26A. Me BAKER: 26A. right -- yes. Okay. So your answer is what? Yes, I just wanted to be sure that he's got the All the population data in the entire table is from the O.E.C.D. except in sources four (4), nine (9) and twenty-eight (28). Q- Four (4), nine (9)... A- Twenty-eight (28) came from Norway directly in that form. Q- So twenty-eight (28), what do you mean it came in that form? Me IRVING: Which are given as supplied. A- Which were supplied to me by the Norwegian Customs and Excise Directorate or from wherever that table came. The Norwegian Customs and Excise Directorate figures came to me already in per capita form. Me BAKER: AUDIOTRANSCRIPT, Division cle Pierre Vilaire & A,so¢i~, Dee