Monday, 7 May 2012

Day 24 - If our product was not addictive we would not sell a cigarette next week

For information on accessing documents, see note at the end of this post

It was a sunny spring day in Montreal - and for the lawyers leading the class action suits against Canada's three large tobacco companies the sun seemed to shine right into the courtroom.

The after-shocks of last week's rulings
(Part 1: Bob Bexon's Documents)

The first item of business for the plaintiffs was the introduction of the five documents that were the subject of last week's harshly-worded determination that Imperial Tobacco's lawyers had acted improperly in refusing to admit the genuineness of their own documents.  Despite having already been found responsible for procedural improprieties, Imperial Tobacco lawyer lawyer Suzanne Cote seemed unfazed and unrepentant as she stood to raise further objections to these files being on the trial record. Justice Riordan seemed equally unfazed by her requests and quickly over-ruled each objection.

Reading the documents, its easy to understand why she felt the need to try to prevent them being made public.

Dead men don't talk (or do they?)

Two of these documents were authored by Robert Bexon, who was director of Marketing Research and Development in the 1980s (Exhibit 112E) before he left to work with Brown and Williamson.  Although he was later appointed president of ITL, this was after the lawsuits had been filed and beyond the timeframe of trial documents. Because he died in a bicycle accident in 2008, he will not testify in this trial. Thus his only contribution to the trial will likely be through the documents he wrote for the company in the 1980s.

The two documents filed today speak volumes.

"Like alcoholics smokers realize they will always be smokers and can always fall off the wagon."
Bob Bexon's handwritten note
(Exhibit 266)
The first (Exhibit 266)  (Transcript available as Exhibit 266A) is a note from Mr. Bexon to two senior colleagues with marketing background (including Wilmat Tennyson, who shared the title of president with Mr. Mercier). He wrote to share his concerns after seeing the results of the first wave of consumer research of Project Viking.

Reluctant perhaps to even share his thoughts with his secretary, Mr. Bexon wrote the 10 page memo in longhand. (I apologize for the handwriting. I hope the reason for this is apparent.) 
He did not mince words:  As it is structured today – without some kind of remedial action – our industry will vanish in the medium term future.

The problem as he saw it was that smokers no longer even enjoyed smoking, and only did so because they were addicted.

The benefits (of smoking) are ones that smokers attribute directly to the “drug” effect of nicotine. As a result, within the modern context even they are not seen as benefits. Because they are chemically induced through nicotine smokers see these positives as reflections of their own personal weaknesses. They get them but they are not happy about it. 

If our product was not addictive we would not sell a cigarette next week in spite of these positive psychological attributes. ... 

The physical/sensory properties of smoking (TASTE/ PLEASURE/ LIKE IT) do not even surface in the smokers description of why he smokes. It is actually seen as an unpleasant sensory experience. 

Bob Bexon was hard pressed, but found a silver-ish lining.

The good news is that quitting is a hard process ....  The motivation to smoke continues. It is a classical approach – avoidance initiation – the rat that has to get shocked to get the food ....  Like alcoholics smokers realize they will always be smoker sand can always fall off the wagon.

"Doing something about starting is the most important priority for the long term."The second document introduced (Exhibit 267) was written the previous year and had an even more limited distribution - it was sent only to his colleague Wayne Knox.  (Given the nature of the material, you and I now have the only existing copies of this document in the world.)  

Bob Bexon looks at changing demographics and smoking patterns and is alarmed at a future where the number of smokers falls to only 22% by the year 2000.
In the domestic environment - ensuring future viability for the tobacco industry involves "fixing" two areas - maintaining our current franchise as buyers of our products and creating new users. There are other strategies. These two predominate.

He recommended that the company set out to ensure that the incidence of use of tobacco products is higher in the Canadian population than would be the case if we did nothing and recommended there strategies to achieve this.  The first was to change public views of smoking, the second was to introduce new products that were an acceptable alternative to cigarettes or quitting.  The third? Initiate projects to insure the continued uptake of tobacco products by young Canadians. For each of these strategies, Mr. Bexon provides a detailed analysis and roadmap. 

The after-shocks of last week's rulings
(Part 2: Contraband tobacco as a health issue)

"Cross border trade is a polite word for contraband": Another ruling that hung over the air today was the decision of Court of Appeal Justice Hinton to defer until September any decision on whether or not the tobacco companies could appeal Justice Riordan's decision to allow health-related questions on contraband.  

The topic was brought up by Jean Louis Mercier when answering a question about the marketing of less-expensive packages of 15 cigarettes, and the fact that contraband was another way of making cigarettes more affordable. After Philippe Trudel asked him a follow-up question about the company's concern about the affordability of  contraband cigarettes, objections were made. Lawyers for all three tobacco companies wanted to avoid discussion of contraband until the issue was resolved at the Court of Appeal.

Justice Riordan was of a different view, and while constraining the questions and answers, allowed them.  He even had a question of his own when trying to interpret a business forecast of increased tobacco exports (Exhibit 272-R?):  So "cross border business" is a code for contraband?"  Mr. Mercier replied: Yes. It is a polite way of talking about contraband.

During the breaks, everyone must leave the courtroom.  The hallway outside the courtroom offers little privacy and unforgiving accoustics --  industry lawyers could be heard calling their colleagues to offer unhappy updates on the contraband questions.

Jean Louis Mercier's farewell tour of the issues

In this last full day of direct examination, Philippe Trudel took Mr. Mercier through new documents on old themes. He was given less latitude in repeating non-answers he had given several times, but still showed a remarkable nimbleness in navigating around direct answers.

Smoking and Health: Mr. Mercier started the day by correcting a comment he had made the previous week.  He was wrong, he said, to have suggested that 15% of smokers get lung cancer. What he had meant to say was that only 15% of smokers were affected by one disease or another. 

Brazil cigarette package
warning on wrinkles
Later in the morning, when asked about a document that had been given to him to help him prepare for a presentation before a legislative committee of the House of Commons, Mr. Mercier offered another off-the-cuff view of the consequences of smoking.

On the television last week they said that smoking causes wrinkles…  Can you believe that?  There is a doctor who says quite seriously that smoking causes wrinkles!  

For a trial where one of the issues is the extent to which the company denies the health consequences of smoking, this was a very odd throw-away line.

(Studies establishing association between smoking and wrinkles date from teh early 1970s. Although Canada does not require health warnings on wrinkles, they are required in several other countries).

Marketing to youth: In response to questions about the marketing of "kiddy packs" of 15 cigarettes (which the company had once agreed should be prohibited under a revised voluntary code), Mr. Mercier first denied that the company ever sold them and deflected responsibility to the federal government, who he said controlled the size of the packages.

Then when shown evidence that his company had been a major seller of this more affordable package size (Exhibit 63 and 270), he suggested they had only done so to respond to the pressure from other companies. Did the company have no concerns that this made cigarettes more affordable for youth?  Well, he explained, kids could buy single cigarettes from Mom and Pop stores, so the size of the packages on the market did not really make a difference.

When asked about the practice of paying retailers to display cigarettes, Mr. Mercier surprisingly said he was not familiar with the term "power wall." Would it not have been a good idea to moderate payments for display of cigarettes near schools?  The retailers said we were too moderate already!

Government relations: Mr. Mercier did not recall immediately who Dr. Albert Liston was (he was a former assistant deputy minister in charge of the tobacco file at Health Canada). Nor did he know that Dr. Liston subsequently acted as consultant to the tobacco industry. Even when shown a record of a 75 minute meeting he had held with Dr. Liston, his memory of the meeting was not as detailed as you might expect from someone who had repeated on many occasions that the industry was attentive to the government's directions. (Exhibit 274)

Another document showed how closely the industry was able to monitor and influence developments at Health Canada. On the same day (November 1, 1988) that the Non Smokers' Rights Association had met with Minister Epp's chief of staff, Russell Wunker, to discuss a potential new warning on addiction, details of the meeting and the government's response had been conveyed to the president of the Canadian Tobacco Manufacturers Council, Bill Neville.  (Exhibit 273 Not to worry, writes Bill Neville, he has been able to head off any suggestion of an addiction warning or package inserts with a "threat" to take the issue to the Prime Ministers Office. 

Product Design:  Mr. Mercier was shown a discussion paper prepared by BAT and circulated to companies in the early 1980s to help them identify the "products for the late 80s and 90s). (Exhibit 277B).  Although this paper had evidently been discussed between Mr. Mercier and his co-president, Wilmat Tennyson (Exhibit 277A) and head scientist, Robert Gibb (Exhibit 277, 277C), he offered little recollection of the many suggestions of ways to respond to the company's research on the effects of nicotine and ways to design products to enhance its effects.

Warning smokers:  When asked about the extent to which smokers understood the risks of smoking and the company's own research showing that only 77% agreed that smoking was dangerous for anyone, he dismissed concerns for the remaining 23%.  With a survey like that you are never going to get 100%.

And as for last week's concession (after repeated questions) that there was technically nothing that impeded the companies from providing additional health information to their consumers, Mr. Mercier added a further qualification. 

Practically it was virtually impossible for the companies to do such a thing on a voluntary basis... Federal action was required, he said, because: Then every package, every brand, every advertisement would have the same warning. There was no competitive advantage for one company over another.

Would you like ice-cream with that?  Sometimes a metaphor can be particularly revealing. When asked (again) about the company's views on addiction, Mr. Mercier (again) suggested that it was better to use the term addictive in the sense of highly desirable ... like being addicted to ice cream.  Later, when talking about changes between the cigarettes of the 50s and 60s and those of the 70s and 80s, he offered that they were much less irritating. Those in the 50s, he said, were like dynamite.  In the 80s? well, more like ... ice cream. 

This already-too-long post has left untouched many of the revealing answers of Mr. Mercier, and the documents presented by the plaintiffs. It is expected that the appearance of Mr. Mercier at this trial will have finished by tomorrow afternoon (including cross examination by industry and possibly government lawyers).

Next up.... the return of Tony Kalhok.

To access trial documents linked to this site:

The documents are on the web-site maintained by the Plaintiff's lawyers. To access them, it is necessary to gain entry to the web-site. Fortunately, this is easy to do.

Step 1: Click on:

Step 2: Click on the blue bar on the splash-page "Acces direct a l'information/direct access to information" You will then be taken to the document data base.

Step 3: Return to this blog - and click on any links.