Examination of Witnesses (Questions 180-199)
DR STEVE
STOTESBURY, MS
CHRISTINE MOHRMANN
AND MR
BARRY JENNER
20 OCTOBER 2005
Q180 Charlotte Atkins: How do you
stop smoke coming out of that area? Who will have to clean that
area? Will it be a worker wearing a gas mask or what?
Mr Jenner: We are of course working
with the BSRIA, as I mentioned, to better understand the air quality
and the ventilation opportunities. When that work is completed,
Mr Chairman, with your permission, I will happily supply it to
this Committee.
Q181 Chairman: Mr Jenner, are you
based in Northern Ireland?
Mr Jenner: We have a major factory
in Ballymena in Antrim, yes.
Q182 Chairman: You mentioned earlier
the issue of what is happening in the Republic of Ireland now,
and obviously there was this week's announcement about Northern
Ireland as well. Do you have any strong views on that at this
stage?
Mr Jenner: We have balanced views,
I hope. Obviously we are disappointed that the wishes of the vast
majority of British public opinion, where seven out of ten, as
measured by the Office of National Statistics, prefer more restrictions
and not a total ban. We have a particular concern specific to
our business because we are a major employer in Northern Ireland
and we have concerns about a particular detail in the proposals
about our ability to test products and even to be able to comply
with European Directives and so forth, where we would crave exemption
to be able to test those products, both from a quality control
point of view and also to meet our obligations under various Directives.
That applies to our R&D department, which is also based in
Northern Ireland, and also that facility would need to be available
for our technical suppliers.
Q183 Chairman: Have you submitted
for an exemption for testing in your workplaces, as it were?
Mr Jenner: If that is a requirement
for us to be able to continue testing here, then clearly that
is something we would have to ensure happens, or re-evaluate where
such R&D work is actually carried out.
Q184 Chairman: Have you submitted
at this stage to the Department?
Mr Jenner: I am not aware of that.
I will be pleased to check and get back to you, if I may.
Q185 Chairman: On this same theme,
Dr Stotesbury, you may be aware that there was a leaked internal
memo from Imperial Tobacco that I got my hands on in mid-August.
It did relate to that. It was in your memorandum that you believed
you would need exemption for testing, for the mandatory testing
you have to do for the marketing of tar and nicotine yields. What
was interesting about the internal memo that was leaked to me,
and which the Committee has seen, is that both Gallaher and British
American Tobacco will not be asking for exemptions. Why was it
that you believed that you had to ask for an exemption of testing
of cigarettes, what you believe to be the mandatory testing of
cigarettes, and other companies do not have to? I thought that
was a rather strange comment.
Dr Stotesbury: I will not answer
for other companies. That is for them. But, from our point of
view, there are two areas that we are seeking exemptions for.
First, the mandatory testing of tar and nicotine yields, which
results in us being able to print a number for those on the pack,
is done under the European Union legislation, which is currently
done in our Nottingham factory and elsewhere as well in the UK.
Secondly, we employ smoking panels both for quality control purposes
of products and for consumer acceptability of new products. We
would like the flexibility to remain able to do so within our
R&D and product development departments within the UK.
Q186 Dr Naysmith: There was another
statement in the leaked memo, and it said, "If SS"—and
I presume that is Dr Stotesbury—"is to be the TMA scientist
at these hearings, he must reflect all TMA company views rather
than the more robust Imperial views on ETS." I wonder if
you could tell us what the difference is between the robust views
that Imperial has and the views that the Manufacturers' Association
are promulgating in public.
Dr Stotesbury: Amongst our TMA
member companies, I am not sure there are differences in view,
in the main. I would argue that we do not have a more robust view.
The memo, I think, means that we are prepared to argue those views
more publicly, perhaps, than other companies have chosen to do
so. But I do not think the views between us—and you will
have to ask others, not myself—
Q187 Dr Naysmith: Somebody within
the industry obviously thinks that Imperial has slightly different
views from the Manufacturers' Association.
Dr Stotesbury: In the context
of that, it was an internal memo, it was produced for internal
consumption and briefing around the events leading up to appearing
at the Committee, and it should be seen in that context, basically.
Q188 Chairman: I do not know who
the author was, but Kevin Barron would not have any committee
he sat on, either as a chair or a member of it, as a show trial
in this Place. It was in the internal document of yours, and,
whoever was the author, tell them to come and have a chat with
to me some time. I know about Stalinism and many other show trials
as well, and I have been against them most of my life, and you
can still do that and be on the left of politics in the UK.
Dr Stotesbury: I have been here
this morning and I can testify to them that that is clearly not
the case.
Chairman: Perhaps a cup of tea at some
stage, maybe with the author.
Q189 Mike Penning: If we can move
on to the economic effects of the Government's proposed legislation.
You have mentioned several times this morning, Mr Jenner, that
you have 12 million people who purchase your products in this
country, who smoke. What effects on your industry would the Government's
proposed ban have? I ought to ask all three of you.
Ms Mohrmann: We do not know what
kind of impact the smoking restriction may have on tobacco sales.
As I mentioned previously, smoking restrictions may have an impact
but there are lots of other factors that may have an impact on
the market and I cannot predict what that would for the UK.
Q190 Mike Penning: The Department
of Health have already said this morning in evidence that they
expect a 4% drop in participation in smoking. Would that be something
you would be expecting?
Mr Jenner: I was not able to hear
that session, but our view would be that there are 12 million
adults in total. They do not all purchase Gallaher brands yet.
Clearly there would be some impact. It is verydifficult to predict
with certainty, because we aretalking about, by definition, the
future. As MsMohrmann has pointed out, there are many factors
that impinge upon "participation" (your word). I think
the DoH figure almost certainly refers to volume sales rather
than participation.
Q191 Mike Penning: Volume sales is
what we are talking about.
Mr Jenner: In that case, using
the Irish example, it may be to the order of, say, between one
and two cigarettes per day. That was the Irish experience in the
first 12 months after the implementation of the ban. But I think
the most recent data in Ireland, from the Office of Tobacco Control,
suggests that the incidence of smoking has increased in the last
few months.
Dr Stotesbury: We have been following
sales data in Ireland very closely, as you can probably imagine.
I would say last year, relative to the year before—that
is the first year that the ban was introduced—your figure
of about 4% is about right. But this year, in the last six months
in particular, I think we have seen sales starting to rise again—probably
in the order of 1.5%. So relative to two years ago, that is 2
to 3% down.
Q192 Mike Penning: So you disagree
with us that people will stop smoking because of this ban and
you can see obviously a slight reduction but then an increase.
Mr Jenner: I did not say I disagreed.
It is commonsense, in our view, that if there are fewer opportunities,
if you will, or it is made more difficult, then people may choose
to smoke fewer per day. But smokers are very adaptable. They may
do more smoking, as it were, in other places. The incidence trends,
the long-term trends, are affected, as MsMohrmann said, by a number
of factors: economic, behavioural and the like.
Q193 Mike Penning: The evidence given
to the Committee indicates that round about 100,000 people a year
die in this country from smoking related diseases. How is the
industry going to try to fill that gap? Because you have 100,000
people dying who cannot smoke your cigarettes and you have round
about 4% no longer smoking, how are you going to promote a market
of smoking to fill that gap?
Mr Jenner: From a Gallaher perspective,
we do not try to fill that gap. We have never and do not try to
encourage anybody to start smoking cigarettes. We simply seek,
with those who have made an informed decision, to persuade them
to choose one of our brands. But it is fair to say that the majority
of the competitive tools having effectively been denied us, that
is a very difficult task, but it is very much about competing
for smokers of other brands—as it has always been the case,
in our view.
Dr Stotesbury: My view would be
very similar. We certainly do not try to fill that gap. We compete
between ourselves for smokers, existing adult smokers, to choose
our brands in preference to those of our competitors.
Ms Mohrmann: I would like to say
that if people look towards the view of Government and public
health authorities about what they have to say about second-hand
smoke and if they have concluded that it harms non-smokers and
if they decide to quit, then that is their decision. We have 8%
of the market share in the UK. If people decide to quit, there
is still a lot of people who have already taken a decision to
smoke to whom we could still be able to communicate our brands.
Q194 Mike Penning: I am fascinated
by you saying that you do not attempt to get anybody to start
smoking. If nobody started smoking, you would have a life expectancy
of about 20 years. You would have died about 20 years ago as companies.
Mr Jenner: The duty-paid cigarette
market here in the UK has declined every year since 1973. That
demonstrates the history of the last 30 years has been about competition
between the respective manufacturers.
Q195 Mike Penning: It is all to do
with smuggling. It is to do with the black market sales in cigarettes.
We can see that in most pubs in my constituency and, I am sure,
in everyone else's constituency.
Mr Jenner: I think it is true
to say that approximately 30% of all types of white stick cigarette
consumed in the UK do not attract any duty or are not subject
to the regulations that we ourselves comply with here in the UK.
Q196 Chairman: I know you are not
directly involved in marketing, but the public houses in particular
that I use on occasions have promotions of tobacco products. Do
any of your companies use public houses as places to promote their
products, as it were?
Dr Stotesbury: We do.
Q197 Chairman: You do. So obviously
there would be a direct effect if smoking were banned.
Dr Stotesbury: Yes.
Q198 Chairman: Or would you still
be able to use public houses without them telling people, "Have
this, but don't light it up here"?
Mr Jenner: That particular mechanism
you illustrate is illegal. We cannot do this sort of thing that
you have mentioned. You can make available brands in public houses,
and they are on display; you cannot promote them as such, because
to do so would be illegal.
Q199 Dr Naysmith: Do you use beer
mats and that sort of thing?
Mr Jenner: No.
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