Examination of Witnesses (Questions 384
THURSDAY 13 JANUARY 2000
384. Can I begin by welcoming our new Member,
Stephen Hesford, to his first meeting. I wish you well in your
work with the Committee. Can I also welcome our witnesses this
morning. Gentlemen, we appreciate your co-operation with this
inquiry and we also appreciate the efforts that you have made
to submit your written evidence. I wonder if I could begin by
asking you to briefly introduce yourselves to the Committee.
(Mr David Davies) My name is David Davies. I am the
Vice President of Philip Morris Europe.
(Mr Broughton) My name is Martin Broughton. I am the
Executive Chairman of British American Tobacco.
(Mr Wilson) Good morning. My name is Peter Wilson.
I am the Chairman of Gallaher Group plc. Until the end of last
year I was the Chairman and the Chief Executive of Gallaher Group
(Mr Gareth Davis) I am Gareth Davis, Chief Executive
of Imperial Tobacco.
(Dr Gietz) My name is Axel Gietz. I am the Vice President
of the Corporate Headquarters of JT International in Geneva in
385. Can I begin by asking a fairly blunt question,
which as a Yorkshire man I can usually get away with. A number
of us visited the States recently and saw some archive material
of colleagues of yours from the companies, some of which are here
today, giving evidence before a US Congress Committee hearing
on oath. What subsequently was proved was that the evidence they
had given was a complete pack of lies. What I would say to you
as an opening gambit is, obviously ,you are not on oath here today,
but what guarantee do we have that the evidence that you will
give us will not be proved to be of a similar nature to that we
saw in the States?
(Mr Broughton) I would like to answer the question
and also beg your indulgence, I would like to make a short but,
I believe, constructive opening submission with your permission,
Chairman. Before seeking that permission let me answer the specific
question. I would contest the characterisation you put on the
"pack of lies"
386. Can I just qualify that. They were asked
a specific question and they were on oath. There are colleagues
here who also saw the archive material and they may want to substantiate
what I say. They had their hands in the air taking the oath and
they clearly lied. They were proved to have lied. It is generally
accepted that they lied before that inquiry. My point to you is
here we take people at their word when they come to this Committee,
we hope we can take you at your word, but what guarantee have
we got that we are not going to see a repeat of the exercise that
happened with the tobacco companies in the States?
(Mr Broughton) I am approaching this Committee as
though I was on oath and working on the basis that anything I
say is my opinion or the opinion of the company, the truth, and
I would deem it to be the equivalent of perjury not to answer
the questions accurately. I think you have access to our records,
you have our submissions. I am not sure what form of guarantee
you would like but I can assure you that everything that is said
today will be assumed to be on oath.
387. You wanted to make a brief statement, if
you would keep it brief.
(Mr Broughton) It will be brief. If I may?
(Mr Broughton) We begin this new millennium
with the issues surrounding tobacco use having deteriorated into
apparently endless argument and allegation between governments,
public health authorities and tobacco companies with no clear
way forward. Perhaps this inquiry provides an opportunity to look
for that way forward, to start the new millennium with a positive
approach. Perhaps we can use the millennium itself as an analogy.
I could argue that technically we are still in the final year
of the old millennium, still 12 months away from the new one,
but why get bogged down in semantics? Let us just accept the popular
understanding and enjoy the excitement of the new millennium and
move on; similarly with tobacco. I do not want to waste this Committee's
time debating semantics. British American Tobacco believes for
decades has recognised that along with the pleasure of smoking
comes real risks of serious diseases, lung cancer, respiratory
disease, heart disease, for many people smoking it is difficult
to quit. We accept, therefore, that in the most simple commonly
understood sense smoking is a cause of serious diseases. It has
been the working hypothesis for much of our research, it has been
believed by smokers for decades, is the most appropriate viewpoint
for consumers and public health authorities. People make many
lifestyle choices about pleasurable risky products, including
smoking. Let us be clear, smoking is very different from some
other risky products, both legal ones like alcohol and illegal
ones like illicit drugs. It does not intoxicate, it does not require
ever increasing consumption to maintain its pleasure, it is not
a short-term risk to health, it does not cause family violence
and is not a destabilising risk to society. Today in the UK even
though over a quarter of the adult population smokes there are
more ex-smokers than smokers. Let us just accept for the sake
of moving forward that the popular understanding today is that
smoking is addictive. Nevertheless, our consumers are not fools
nor helpless addicts, shareholders are not amoral, 100,000 employees
are not villains, the shopkeepers selling cigarettes are not drug
pushers. It is a legal business generating huge revenues for the
governments. They are a legal product that form part of a lifestyle
matrix balance of short-term pleasure against long-term risks
depending entirely on each individual's choice. For the Committee,
where do we go from here? I regret that there is a reluctance
to work with tobacco companies. The term "big tobacco"
is used by the anti-smoking lobby as a pejorative term; in fact
big tobacco is responsible tobacco. The past co-operative efforts
of Government and the industry have been productive. The principal
Government product modification strategy producing lower tar cigarettes
acceptable to consumers has been met by the industry. I put it
to you that it is better to work with people who accept significant
corporate responsibilities, as we do, who actually know the product
and the science. We could all remain in stalemate arguing extremes,
on the one hand laissez faire, on the other social engineering
approach promoting the eradication of smoking. I suggest to you
there are other choices. To use a popular phrase, we believe there
is a third way. Governments, public health authorities, the UK
tobacco industry should work together to ensure that only adults
smoke, that the public are appropriately informed of the risks,
that smokers are informed of the varying levels of risk and are
therefore encouraged to smoke fewer cigarettes, to smoke lighter
cigarettes, to quit smoking sooner, that the desires of non-smokers
to avoid the annoyance of smoke can be accommodated and that the
effort to both research and develop lower risk cigarettes and
also communicate those developments to consumers be encouraged
and supported unencumbered by opportunistic criticism.
389. Mr Broughton, I do not want to curtail
you but you understand that clearly we have got a lot of questions
here and if all of your colleagues were to be as lengthy as you
have been then we may be here all day just listening to statements.
Most of what you have said so far as I can see reflects entirely
what is in your written evidence which I know my colleagues will
have read with great care. I saw several of them in the library
this morning reading through, so they are familiar with what you
have said. I would be grateful if you could curtail your remarks.
Perhaps your colleagues may wish to respond to the initial question
I put which is a fairly fundamental question about the track record
of your industry as a whole in respect of questions that have
been raised by politicians elsewhere. Mr Wilson, do you want to
respond to that initial point?
(Mr Wilson) I will do my utmost to answer your questions
as openly and as honestly as I can. I endorse Mr Broughton's comments
as if we were on oath. My knowledge may not be complete over everything
that has happened in the tobacco industry in the last 50 years
but I will do my utmost to answer openly and honestly the questions
that you ask.
390. Mr Davies, do you wish to respond?
(Mr David Davies) Philip Morris acknowledges Chairman,
that there are legitimate concerns with which this Committee is
concerning itself that merit being addressed by this Committee.
As we said in our submission, we believe that there is an opportunity
to create a platform for co-operation, for dialogue in which we
can work with this Committee to find sensible solutions. It is
my intention in coming before this Committee, as it was when we
made our submission, to seek to assist the Committee. It is that
which motivates me. It is the desire to work with Government to
find solutions to the issues that are legitimately of concern
and that merit being addressed by Government.
(Mr Gareth Davis) I think anything I would wish to
say in terms of introduction is encapsulated in our submission
anyway. Secondly, yes, I absolutely intend to tell the truth.
(Dr Gietz) I totally agree. No opening statement from
me. I will answer your questions truthfully and to the best of
391. You all understand the concerns the Committee
has over what happened in the States and what is happening in
the States currently which is of direct relevance to what is happening
in this country. Can I ask a second general question. As an industry
in respect of the work that you do in your own companies, do you
accept that you have a legal duty to produce as safe a product
as you reasonably can and, if so, do you believe that you are
actually doing this?
(Mr Wilson) I speak for Gallaher. We understand and
accept that there is a general agreement amongst most people today,
particularly the medical and scientific community, that smoking
can be dangerous and can cause a number of diseases. I am not
going to begin to argue with that, I accept that. We have worked
co-operatively with Government for many, many years in trying
to solve the problems. We wish to continue to do that. At the
moment our main thrust is to develop better and increasingly lower
tar cigarettes as the route agreed and advocated and encouraged
upon us by Government over many years in the past. Today that
remains our strategy, to continue to develop better quality and
lower tar cigarettes. To my knowledge no-one anywhere in the world
has come up with an alternative better way forward.
(Mr Broughton) The brief answer to your question is
yes. I think we would like more co-operation from Government and
public health authorities. In the last few years, contrary to
history, it has been more difficult to get co-operation. I think
with greater co-operation we could make more advances.
(Mr David Davies) When some Members of this Committee
visited with Philip Morris in Washington at the request of the
Committee we had present one of our senior scientists and you
will recall, Chairman, one of the issues we discussed then was
the latest commercial attempt by Philip Morris to introduce a
product which we believe does have the potential to offer benefits
to the public. That, of course, is the Accord product which is
referred to in our submission. The research that we have done
in order to develop that product and the research that we have
done in relation to the characteristics of the product have been
presented to public health groups in a number of different venues.
I think it is fair to say that what we have presented has been
viewed as mostly encouraging. That represents the sorts of goals
that we have had over the decades in relation to improving our
392. So you all accept you have a legal duty
to produce a safe product and you all accept that you are doing
(Mr Broughton) To produce as safe a product as possible.
393. As safe as possible. Can you be specific
about what you mean. What you are saying is that smoking is always
a risky business and, therefore, you cannot have a safe product.
(Mr Broughton) Correct.
394. There cannot be a safe way of smoking?
Is that what you are saying Mr Broughton?
(Mr Broughton) There is no safe way.
(Mr Wilson) I would say that.
395. Mr Wilson, you are quite clear on this
categorically, there is no safe way of smoking?
(Mr Wilson) To my knowledge as at today there is no
(Mr Broughton) Yes.
396. Is that a general consensus amongst our
witnesses? It is a very important point, that there is no safe
cigarette. Is that generally agreed? Would you all respond on
(Mr David Davies) That is a view which has been stated
by Philip Morris. I think it is fair to say that the industry
is not capable of producing a product which the health community
would regard as safe. It is Philip Morris's view that today there
is no safe cigarette.
397. It is Mr Broughton's view and it is Mr
Wilson's view. There are other witnesses, is it also your view?
Do you subscribe to that point?
(Mr Gareth Davis) Chairman, I do not think that we
can say that it is safe or it is unsafe. We are obviously aware
of the public health debate.
398. So you are not sure whether it is safe
(Mr Gareth Davis) What I am saying is we do not know
whether it is safe or unsafe.
399. So you differ from your colleagues on this.
They have made quite clear where they stand.
(Mr Gareth Davis) I do not understand the full context
or background to their judgments, but