Tobacco Institute Speech

CONFlMAL NEW DIRECTIONS

\ A presentation of ~ The Tobacco Institute Staff by Horace R . Kornegay Chairman to the Executive Committee June 25, 1981

COR TI 4959

CQNF(QENTIAL Let me set the basis for this discussion with a very Sig sentence• Our goal today is to gain your enthusiastic support for a new way of life in the public affairs responsibiiities of this industry in general and The Institute in particula and our goal in that effort is to change public opinion and reduce public pressure .

Details to follow . But, first, let's just look at where we are on June 25, 1981 . The campaign managers rer~inded you at Marco that you have ten million dollars invested in initiatives and nothing to show for it in terms of any drop in sentiment to solve the public smoking problem by government intervention . You also have made a substantial investment in scientific research support uittf nothirig to show for it in terms of lifting the killer label from cigarettes . You have investments in trade organizations including but not limited to The Tobacco Institute . The result of all this is that while your business climate could be worse, it is not good enough . You deserve a better return on your spending . Your position is that it hasn't been proven that smoking harms smokers . Yet ninety-one out of a hundred Americans believes it does and that includes 85 out of a hundred smokers . Five years ago half the smokers felt they were seldom if ever uncomfortable around other people . Last year the number was down closer to four in ten .

/ij'~®360 11 COR TI 4960

-2-

CDNFIDENTIAL In 1978, 84 percent of the smokers voted against Prop . 5 . In 1980, only 75 percent did, a significant nine-point drop . After the 1978 vote, 71 percent of all the voters still favored public smoking restrictions . After the 1980 vote, 75 percent did, a significant four-point loss for us . Hardly anybody thinks you or The Institute is a credible source of information or persuasion about smoking and health . We're talking about three or four out of a hundred nonsmokers, and perhaps only six or seven smokers . None of these matters is getting any better . In the meantime, our research and your research and your sales are showing a plateau in cigarette consumption, a declining proportion of adults buying them, and a diminishing social acceptability of smokers .

~

We think we can do some meaningful work to reduce the bias that puts an artificial lid on your market, and stop the creeping prohibition . You know what your goals are five, ten years from now -a larger market and a larger slice of it . But we are not making much of a .contribution with traditional, protesting press releases and traditional, smiling calls on TV stations and traditional, negative lobbying . We've got to have some merchandise to sell . Some things to be proud of that can persuade the public and the politicians that our interest is in fact their interest .

4, 036012 COR TI 4961

-3-

CONFIDEN i 1RL

There is no way to tell them the indoor air is clean when they can see it isn't .

There is no way to tell them smoking may not be unhealthy as long as the New York Times and the networks only have medical studies which say it is . There is no way to persuade them we care about the fire problem as long as we just say we can't do any .thing about it . There is no way they'll believe we're concerned about kids smoking cigarettes unless we join in solving the youth problem . There's no way we can effectively attack bad science without scientists mounting the attack . There's no way we can produce good science -- except by accident -- if we just throw money at it and walk away from the researchers and their results . We've got to be candid and lay our performance alongside that of some other people who have found themselves in public and political trouble .

-

The container industry is communicating about their recycling centers . The lumber business is advertising its reforestation . The energy people are talking about plow-backs to discover new sources and telling people to conserve . The spirits industry is teaching responsible decisionmaking and educating people on moderate enjoyment .

`

VIiOQ

13

COR TI 4962

-4-

CONFIDENTIAL In contrast, we've walked away from the millions of voters in California and Florida and legislatures at all levels with some temporary victories and haven't doae what we need to do to convince them that legislative solutions to their problems are implausible in the first place . That is our goal, the ultimate return on your investment and I will say it again : To chan e up blin opinion and reduce up blio pressure . We want this to be clearly understood . We don't mean just picking quarrels with specific proposals . We do mean turning aside the impulses which lead to their introduction . This means turning public opinion into beliefs that some problems don't exist, that other problems are overstated and that still other problems can be solved without laws and regulations .

We deplore the growing social unacceptability of smokers but we can hardly rescue them if we're not acceptable ourselves --

acceptable in the sense of a respect and a credibility which we can earn . We will not earn those things simply by continuing to criticize other people's ideas, and leaving an impression that we put self-interest above public interest . We've got to take

some actions, then communicate them to the proper, targeted audience, and then measure the results to assure a return on the effort . And we can do this without intolerable risks to our

principles or our legal protections .

-f Q36(3144

COR TI 4963

-5-

CDNFIOENTIAL

Twenty-seven years ago, the tobacco industry announced formation of what is now called the Council for Tobacco Research . At the same time the American Cancer Society offered the first major epidemiologic challenge to smoking . For the past 27 years, the tobacco industry has been confronted with an increasingly "negative" medical press and medical profession, which, in turn, has generated a negative response from popular media and governments along with a decline in the social acceptability of smoking . Science remains the fundamental problem confronting the industry . Bad press, unwarranted regulation and poor opinion are its symptoms . Symptoms cannot effectively be treated without attacking their underlying cause . Our scientific posit;i,ons must be less defensive and more constructive . Our research support objectives must be reordered and our research support results must be publicized . Industry communications must contain less of "But that study is wrong" and more of "Look what this study shows ." As the chief conduit for your research investment, CTE has little visibility in the scientific world and almost none at the popular and political levels . Its research grants are made without industry advice, its grantees do not make themselves available in the public affairs arena and the Council itself does not engage in dialogue or debate with other researchers or organizations . On the other hand, the published results of Council-supported research do contribute to the body of scientific knowledge .

~036015 COR TI 4964

-6-

CONFIDFNTIAL In order to shift the industry's scientific activity to a "proactive" posture, we have to make The Institute itself responsible for research intelligence, repeated research and directed

research . These activities can and should be complementary to our current research support through CTR . Now let's look at some specific strategies and tactics which are essential . First, and most important, we must establish that there is no proof that smoking harms smokers or nonsmokers . How do we begin? By making it our cardinal strategy to provide more timely . emphatic and valid response to questionable science . Four significant tactics must be employed• -

1 : Operational Requirements . A multidisciplinary scientif,ic advisory committee should be formed for the purposes of preparing recommendations for repeated and directed research

activities for presentation by The Institute staff to the Executive Committee and overseeing all approved research projects . - ~ The Institute should vigorously communicate the various facets of the industry's new and total research commitment to various publics, including research institutions, government

research aencies, the medical profession, legislatures, voluntary health associations, and the public . We believe this is essential to building The Institute's credibility in the political and media arenas subject always, of course, to our observance of the guidelines for legal clearances on matters pertaining to smoking and health .

-1,e 3 so .4 s COR TI 4965

ca N Fi D" IAL 2 . Research intelligence . We must increase our intelligence gathering capacity in order to better anticipate research results likely to be published or publicized . An industry-wide group of individuals should be identified and given responsibility for intelligence gathering in the area of smoking and health . These individuals would report directly to the medical director of The Institute .

Our medical director should be given the responsibility for coordinating industry coverage of the programs and analysis of the papers at scientific meetings and for identifying and following through on additional sources of scientific information . 3 . Repeated research . The scientific advisory committee should discuss the implicat fns of scientific papers . Contacts should be made with other scientists including the authors as a means of preparing to respond to publication or publicity . The committee should also determine whether a follow-up research project should be undertaken and should review proposals for carrying out such projects . The scientific advisory committee with the approval of the Executive Committee should be authorized to fund repeated research as a means of checking the validity of the original research conclusions . 4 . Directed Research

The scientific advisory committee

with the approval of the Executive Committee should be authorized to initiate and fund directed research projects designed to fill perceptible gaps in knowledge . .

~0360~7 COR TI 4966

-8-

CONFIE :;r_1AL

The scientific committee would identify areas of r.eeded research, set priorities, announceethe availability of support for selected areas of research, review all proposals . monitor the studies as they are being carried out, and provide support to the industry at the time the results of the studies and their analyses are available for public announcement . Now, even though these steps make us better prepared to meet and deal with health issues, particularly the nonsmoker health issue, we are left with the smoke annoyance issue . It is contributing heavily to negative opinion and political pressure . It is true that some of the leaders in the anti-smoking movement have fanned the flames of discontent, but those in the ranks are motivated just as much by seeing a chance to get rid of what they regard as a social annoyance . Our best opportunity to meet that problem is to be a part of its solution . So our second major strategy is to notify managements of up blio places and workplaces that The Institute is ready t_o help with reasonable projects to enhance the comfort of smokers and nonsmokers . At the tactical level, we are already pressing the CAB, in a highly focused situation, for deregulation along with assurances of working with carrier managements toward reasonable comfort of all passengers without discriminating against any of them . We must join other industries and small businessesespecially through their trade associations, which are the targets of "clean indoor air" regulation, in devising and promoting reason-

~ lia~JOV~l,7

COR TI 4967

-9-

CONFiC ^,

able programs which respect smokers' and nonsmokers' preferences . We can do cooperative studies with the National Restaurant Association and the National Licensed Beverage Assoca ion on

ventilation in restaurants and bars . We can be prepared to coop-

erate in funding such studies and publicize programs which may ensue . We should meet with such organizations immediately . u We must openly recognize that discourteous smoking is considered an annoyance to some people and signal our willingness to support and promote reasonable efforts to resolve the problem without legislation . We can "package" the persuasive comments of media and allies in the recent initiative campaigns to demonstrate elsewhere the voter judgment against legislative solutions . Since our Marco meeting, we have already begun distribution of a new publication to meet this need . __ We have to strengthen coalitions and alliances . Our industry shou-ld expand efforts with its potential allies and supporters to identify the many ways in which we can be mutually supportive without sacrifice to our own priority objectives . - This means we become more active and recognizable participants in issues beyond our immediate or parochial concerns, issues such as corporate taxation, product liability . excess regulation, and so on . Contacts made in these endeavors will open doors to support for our special concerns . We must elevate our problems into broader issues, particularly excessive regulation . We should support and, where they

COR TI 4968

_10-

CONFIQ

don't exist, create public efforts against more regulation of any sort . And then we have to publicize the industry's new approaches continuously at association meetings, in publications to the affected trades, to public officials and the public itself . So much for co-operation in the private sector . Now I am going to turn to co-operation in the public sector . We have good reason to mistrust certain agencies of government, and I suppose some of their people feel that is mutual . In any event, let's consider a third fundamental strategy, to improve our relationships with government authorities . We see an opportunity for three significant tactical moves . 1 . There should be a prompt arrangement for confidential notification to the governmetrt of current "additives" in cigarettes . The government request is about ten months old and "addi-

tive" has become a new buzzword among anti-tobacco spokesmen and popular media who are urging a legislative answer . In a broad

sense, the issue fits the larger and now familiar context of "consumer information" despite the irony that "consumers" of cigarettes are not asking for it . The longer the request is pending, the greater the opportunity for those who want to further damage

the credibility of the industry . The Institute should promptly negotiate a delivery system to the Surgeon General which would a) avoid disclosure of particular brand ingredients : and b) assure confidentiality .

COR TI 4969

OONFIG 17

;a L

2 . The Institute should assume responsibility for official measurement and reporting of tar, nicotine and CO yields . The cigarette industry stands almost alone in what amounts to "ingredient labeling" by the government rather than at its behest . The Institute's laboratory, for 14 years, has tracked the government measurement process using a share of the identical market samples . The real cost of its operation may be assumed to be the same cost of the Federal Trade Commission operation . The Commission, whose technical staff has learned to have confidence and respect for the TITL operation, is facing severe budget restrictions .

The Institute should be prepared to respond favorably to a Congressional request that we develop promptly a cooperative relationship with the Federal Trade Commission, at no additional

expense to the industry, with a potential saving to the government, and provide its own measurements twice a year to the FTC . We need a relationship of trust with that agency, working toward cooperation in measuring the yields to improve the confidence of the government and the public . The Institute should publicize the new cooperative relationship between government and industry . 3 . We should develop, promote and press enactment of legislation to minimize the hidden data tricks which have victimized this industry .

-

Ours is a simple concept . Time and again we have seen government and legislative policy set at least in part on the

COR TI 4970

-12- CR,'F!Of ; basis of data which are not available to either the target -us -- or to the marksmen -- the officials who make anti-tcbacco policies and regulations .

We are talking about a "Truth in Statistics" requirement, legislation which would recognize judicial concepts which are normal in judicial proceedings and should be extended to legislative and regulatory proceedings . If the Surgeon General's policy relies on the American Cancer Society's million persons study, which we hear, by the way, is being resumed, he and we are entitled to review its underlying data, not just the carefully drafted summaries which come from a biased source . At the other perhaps ridiculous extreme, the same goes for Jim White's lung function tests . We think this is a principle very hard to quarrel with . We think we could lobby in this area with enthusiasm, for something for a change instead of always opposing .

As a fourth basic new strategy we must identify issues

which can be turned from liabilities into onoortunities . There are two right now which in our judgment provide this possibility . The first is to place the matter of youth smoking in better perspective . The voluntary record of the tobacco industry in restraining product promotion to young people is admirable -- but few people are aware of it . In addition, the long-range communications plan provides for review of'the advertisiag guidelines by the committee of counsel . The project should be given priority and its results publicized .

~Q36C3: 2 COR TI 4971

-~3-

CONFiDEN

The Institute should be authorized to take steps to measure and publicize the trends of youth behavior regarding tobacco, as a means of placing public concerns in proper perspective .

The Institute should work with education officials with specific assistance to guide youngsters in prudent lifestyles and judgments, not involving health "scare" tactics, and communicate its activities in educational and other official circles and to the public itself . The second tactic is to participate in public education efforts toward fire prevention . The cigarette, rather than the carelessness of its user, has become the target of public, interest-group and regulatory pressures . Manufacturers have become defendants in liability suits . In order to meet the pressures, we should begin promptly to join others in public education about all fire causes and their prevention . We should continue to improve Institute responses to public questions about the role of cigarettes in accidental fires . We should continue to investigate the adequacy of statistics on fire causes and methods of determining them . And we should communicate fire prevention activity to other prevention groups, public officials and the public itself . The fifth and last strategic decision we urge upon you is approval of a statement of purpose of advertising . I have been given such a statement ; carefully drafted and unanimously approved

i 03s0~a COR TI 4972

-'u-

~ir

CC?'

by the Communications Commi,ttee . They have asked us to submit 'It today and we do so with enthusiasm . It reads as _°oilows :

"The Communications Committee is committed to instituting national advertising dealing with the choice to smoke and the social custom of smoking . This will be accomplished by : - attacking bad research with accurate data, including industry funded research

- challenging researchers where vulnerable by ulterior motive or lack of science - supporting the reasonableness of individual choice - questioning the bureaucracy and personal aggrandizement of certain anti-smoking organizations . In effect, this Communications Committee is readying advertising

to stand up to the industry's detractors and by that means improve the environment for those who choose to smoke . We intend that each advertisement be a positive statement appropriately supporting the position that smoking is an individual, enjoyable, adult custom ."

There is one other especially important by-product of these new commitments . We must keep before us the question, if The

Institute is to shift to a truly "proactive" posture, whether its management structure is adequate, The structure should be tested in three areas .

--j-Q'3E© .".4

COR TI 4973

-i5-

The first is internal, the staff . We are confident that ve can implement the recommendations outlined here, and also meet our continuing responsibilities under the business plan and the long-range communications plan .

The second is external, the membership as it is represented on standing and ad hoc committees . It must be understood that the Executive Committee directs our activities . We believe the Execuive Committee should reassess and provide clear direction of the role of all the other committees . Committee policy recommendations must have Executive Committee approval . The third element of our structure, also external, is the agencies and firms who assist and advise The Institute . We recognize our responsibility to constantly assess their contributions toward meeting The Institute's priorities and objectives . To conclude now with a quick review, we have given for your consideration and discussion an explicit goal and five supporting strategies with examples of useful and productive tactics . The goal is to change up blie opinion and reduce up blie pressure . The strategies are first, to provide more timely, emohatic and valid responses to euestionable science . Second, to notify managements of eublic lp aees and worklp aces that The Institute is ready to help with reasonable projects to enhance the comfort of smokers and nonsmokers .

~Q'3 © 5 6

2 .

COR TI 4974

a ~ -~, T . .

-16-

C 0~~ :

- ~I I

Third, to improve our relationshins with government author-

'ties . Fourth, to identify issues which can be turned from 1iabflities into opportunities . Fifth, approval of a statement of puroose of advertising . The beneficial side effects of this program will be numerous -- the morale of our industry and its customers, just to name two . The tactical opportunities in this program will be far more numerous than the few I have mentioned .

Z ) C'

3GO

a

COR TI 4975