THURSDAY 3 FEBRUARY 2000

MR MARTYN DAY

  1200. Even if it were free choice, it is still killing people and my point to the tobacco companies was that they should have some moral responsibility by producing such a dangerous product. One of the things about nicotine addiction is that we have evidence from ASH that in fact it is incredibly difficult for people to give up smoking and it says here that without treatment evidence suggests that only about three per cent of those who attempt to quit without help become permanent ex-smokers. I think this addiction argument is very powerful. I wonder if there is any avenue for pursuing that, to say it is not a free choice. You are presenting a dangerous drug, an addictive drug.
  (Mr Day) I think it is incredibly difficult, for the reasons we have discussed, that once it was clear, say by the sixties and maybe the seventies at the latest, that nicotine was addictive and was an integral part of the cigarette, what exactly does one do about it? As I say, even today people like Martin Jarvis argue that you should retain the nicotine in the cigarette to allow people to continue smoking in order to stop them doing compensatory smoking and that you should be doing other things to do with the tar and the rest of it. It is not an easy debate because once you have got somebody hooked then you get them hooked when they are 13 or 14 years old, and unless they have got unusual willpower to give it up you have got somebody hooked primarily for life. For that individual, whatever you do, if you try and reduce the amount of nicotine they smoke more, and then there will be an outcry. It is very difficult to come up with some clearcut position that is accepted everywhere as to what line should be taken.

  1201. And you have to keep producing new addicts because you are losing about 120,000 people a year to smoking related premature deaths, so it is a vicious circle, is it not?
  (Mr Day) It is, and I think the whole issue of advertising in relation to children is a very crucial one. It is one that government and the health bodies have looked at for many years and not found any resolution to at this stage. There was one suggestion in the BMJ article which I absolutely agreed with, that cigarettes should be sold in a brown paper bag as some sort of prescription. I think that is right. In the end you have to take some very radical solutions to try and move it away from being some sort of glitzy substance that kids like smoking.

  1202. Why do you think it was not banned given that the evidence in the 1950s and 1960s was quite clear that if it had been a dangerous drug, say thalidomide or something which was causing damage to people, it would have been withdrawn from the market straightaway? Can you say what your views are on why you think it was not?
  (Mr Day) At that stage as far as I remember something like 80 per cent of the adult male population were smokers. It was not that long after the prohibition era in the States in terms of alcohol. I think there was simply a mood that if you tried to ban a substance that zillions of people in this country were addicted to there would be a massive smuggling operation going on, maybe BAT inspired, that would have happened. Politically it was impossible then and I think probably politically it is impossible now.

  1203. You made the point quite seriously about selling them in a paper bag. I was very interested in what you were suggesting there, that they should be available by prescription for people who are dependent.
  (Mr Day) I agree, absolutely.

  1204. Could I pick up on this point that Mrs Gordon has made about 120,000 smokers die each year, so if they are going to stay in business they are going to have to recruit new smokers here or in the Third World. The point about addiction was that of free choice and adults. What we do know is that a substantial number of addicts became addicts before the age of 16. The tobacco companies have consistently denied that they market their product to target under age smokers. They did say that their advertising agencies would look at research which they buy in which may have age ranges below the age of 16, but we did have evidence before us that the advertising agency on behalf of Silk Cut specifically conducted research into the different characteristics of those in the 25 to 34 age group and those in the 15 to 24 age group, specifically for Silk Cut, in order to maintain the market share and to ensure a future for the brand Silk Cut, that it captures these people's values. In my view that was clear evidence that Silk Cut were looking at targeting their product at an age range of young people to whom it was unlawful to sell the product. I would like to ask whether you have seen in the archives that you have gone through any evidence that the tobacco companies specifically market their product at under age smokers or children. If there is evidence, and clearly we have had evidence as far as Silk Cut is concerned, in view of the addictive nature of the product, does that strengthen any legal claim that a smoker may have against the company.
  (Mr Day) Apart from the documents you are referring to about Silk Cut, the only documents that we have seen were documents that rather euphemistically refer to "young people" or "youths" or that sort of thing and left it open as to what exactly that meant. It may well be that in terms of where we have got to in the discovery it was the sort of document that had not yet been made available. There was a tranche of documents that was unlikely yet to have been made available. It is clear, is it not, that if you have got this product that so many of your older customers are dying from, then you need to replenish your stock and you can see with Marlboro becoming such a trendy cigarette that that has made Philip Morris the number one company? The clear logic is always there that the companies need to attract in young smokers. It seems to me that they have been aware that that would be dynamite in the hands of anybody and that clearly it would be quite difficult to take a line when you do not know who is in an advertising company so who you give your instructions to you have to be very careful about. I would not imagine myself that you would have many documents, if any, which were making such a specific point because you would be worried to death that that would get into the wrong hands. Yes, the logic is there inescapably that that is the direction that they must be going down.

  1205. On the same point as my colleague that the companies are having to attract a new generation of addicts if you like, I was going to ask if you felt that they were legally culpable for children under the age of 16 smoking. We have talked to the tobacco companies and the advertising agencies and they protest all innocence that they are directing their advertisements and all their information to adult smokers, whereas it is blatantly obvious that more young people are smoking under the age of 16. We already live in a society where we know it is going on. Somehow this is still happening and whatever the tobacco companies are doing to avoid attracting young smokers is not working. I wondered if there were some legal culpability there.
  (Mr Day) Whereas in the States you get very blatant examples of where the whole image is to attract young smokers, whether through Jo Camels or through Virginia Slims, and my understanding—and I am not an expert on advertising here—is that one does not get such blatant examples and the regulations and restrictions here are far tougher than they ever were in the States on those sorts of issues. It is difficult in the sense that as you say virtually everybody who starts smoking smokes when they are a kid. We all know that; that is simply a fact. The tobacco companies can in many ways rely on that. I do not think they need to do a lot. As when we were kids and it was pretty trendy to smoke, it remains that all these years later. In many ways they are not having to take many steps in my opinion to promote that interest. There is that natural seam that has allowed the feeling that if you smoke as a kid you are a notch above those that do not. I think it is probably true that they have not needed to take major steps and for all the legal reasons we have discussed probably they have been wary about taking steps that would in any overt way point the finger at them because of the political damage it would do them. Legally, because people are not legally supposed to be smoking at that age in the sense that they are not supposed to be sold cigarettes, then they can always point the finger at the tobacconist rather than the finger being pointed at them. As far as I can see the amount of effort they have put into trying to ensure that tobacconists do not sell to under 16 year olds is pretty limited. In the States there were campaigns where in some states they sent round individual kids who were 12 or 13 to tobacconists to see if they would sell them cigarettes. Many of them did and they then tried to get them prosecuted. By and large you could not imagine a more perfect scenario for the tobacco companies to simply sit back and put these products on to the market.

  1206. Is this again to do with smuggling because young people have very limited incomes and smuggled tobacco which is much cheaper is a way of getting these young people hooked? They can afford it whereas they cannot afford expensive cigarettes.
  (Mr Day) In this country or abroad?

  1207. In this country.
  (Mr Day) I am sure that is absolutely true that the price is a major prohibiting factor in terms of the number of cigarettes people smoke in this country, or that kids smoke, and that smuggled cigarettes provide an avenue for getting them at a cheaper price; you are absolutely right.

  1208. It seems to me that there might be an interaction between the issue that we explored earlier about the causal effects of cigarette smoking and disease and the issue of the addictiveness of nicotine because what they say is that you can give up, so, okay, you have started but you can give up. It is a matter of willpower. But of course one of the things that could encourage people to be strongly motivated is the thought that perhaps they would be very hopeful of not dying of throat cancer, for instance, or other oral cancers. In denying the causal effect on disease are they not also undermining the motivation for throwing off the addiction? Are these not interconnected issues, not totally separate issues? We have explored them as though they are two entirely different lines, but it seems to me that they have got a strong interaction.
  (Mr Day) I think that is absolutely true. Particularly in the earlier days the willpower of anybody to give up is always finite. In the end you have the hope, you say to yourself, "Firstly, the government is still allowing these products to be on the market. Secondly, there are people who think it is not damaging. Maybe it is true." Most people who smoke have a real pleasure out of it. It seems a rather compulsory pleasure but a pleasure none the less, and they do not want to give it up. They welcome any sort of support they can be given for the idea that in the end you will never be taken out by smoking, and all the arguments about here is a 90 year old guy who has smoked all his life and he is as right as ninepence, the sorts of things that people talk about in everyday parlance. I think it is very clear that the two are linked; you are right. They want to discourage people from taking themselves in hand with that necessary willpower to give up that need because of the addiction by giving people that extra little bit of support for the idea that it might not be true.

  1209. Would it be straightforward or more difficult in pursuing in relation to young people the question of the marketing strategies used to establish exactly what you mean by marketing to young people? Do you see a difficulty from a legal point of view in formulating the arguments? What is in my mind is that I can see how you could pick out something as appealing to a 10 year old, say, and a cartoon and the use of bright pictures and that kind of thing, but the 10 year old and the 15 year old are rather different animals and the 15 year old might be quite cold to what appeals to a 10 year old and might in fact be much more attracted by adult advertising. I do not know whether you have tried to work out legal arguments on this issue of drawing in youngsters but do you see problems with it or do you think it would be relatively straightforward to conduct a legal type argument?
  (Mr Day) I am no expert on advertising for children. There are experts here far better qualified than I to talk about the implications of that. The difficulty on a legal basis is that clearly if tobacco companies were seen to be directly selling cigarettes to kids, a line of 12 year olds going up to their doors and selling cigarettes on to them and using cartoons or The Simpsons or something like that, then one would have a very strong clearcut case. But a lot of this is very much more sophisticated than that and much more difficult to control. One sees the kids getting used to the adverts, the complicated Benson and Hedges adverts, they way that they have been able to give that image in this complex way. I remember, as an aside, being in the States and a guy who was an expert on advertising in the States was in front of a group of mainly American lawyers and me putting up some of the British adverts. He said, "What do you think these things are advertising?" Some of them were B&H adverts, not a single person on them, not a single cigarette to be seen anywhere, these very complicated images. The lawyers said, "What on earth are those?" He said, "These are cigarette adverts." In this country we have got very used to it. In America, unless you have got a person on there smoking, they clearly do not think that you are going to recognise that this is a cigarette ad. All I am trying to say is that it is a very sophisticated area; it is a very sophisticated market, but it is underlined by the fact that our kids still feel that it is trendy to smoke. Until one makes it in some way not trendy to smoke, until the social cachet of it is in some way removed and maybe, as we were talking about, having it on prescription in a brown paper bag is one way one could contemplate that where it does not look quite so trendy: if you want a cigarette you pull out your brown paper bag for them to take a cigarette out of. Again that is not my field but unless you move away in some way from that cachet it is hard to imagine that our kids are not still going to find it attractive.

  1210. The position of Imperial in front of this Committee seems to have been markedly more defensive than the other four companies about admitting the nature of the health risks of smoking. If you were lawyer to a tobacco company, which I can see might require quite a leap of imagination, and I believe lawyers take all sides of cases and defend unsavoury people so they are undoubtedly used to it—
  (Mr Day) There are limits though.

  1211. What advice would you give to a tobacco company like Imperial, assuming that your interests, like theirs, were purely in their commercial survival? What would be the key legal advice that you would give
  (Mr Day) That is enormously difficult. Firstly, it is clear from the documents that Imperial have always taken a more hawkish line in this country than Gallaher. As far as I can see, reading between the lines, they have always felt that Gallaher were a bit too much of a soft touch and they have always had to firm them up a bit. There was a nice line when they closed down the research facilities in Harrogate that Imperial, page 12, were saying, "Look, we are really fed up with the fact that all these results keep on being used", and Gallaher were saying, "Sure, but we have got some sort of responsibility", and Imperial were saying, "Do not be so stupid. Let us pull out of this now." Traditionally Imperial have always been a more hawkish organisation. If one were advising them one would have to take that on board, that they are tending to take a tough line. I am not surprised at all when you say that they are the ones who are least likely to give in soonest. For them it is a difficult market in the sense of politics changing around and hopefully a reducing market in this country, but obviously that has not been entirely true in more recent times with children taking cigarettes up again. For them the difficulty is that you have got this market in the United Kingdom which is likely to be slowly reducing down. What do they do with this product of theirs? We see with a lot of other companies, like Philip Morris, the enormous diversification, R J Reynolds again diversifying. It is in some way rather surprising that the British companies have not taken the same sort of approach so that if in the end the bottom falls out of the cigarette market they have not got other things to turn to. They may have their own reasons for doing so but I do not really understand that.

  1212. What you have said there about diversification has reminded me of some evidence we had from the witness from the World Health Organisation, Dr Derek Young. This related to the huge efforts which the tobacco companies had made to try to persuade the World Health Organisation to back off its interest in tobacco. The tobacco witnesses did express strong hostility in front of us to the World Health Organisation. He gives a quote relating to back in 1988 when the then President of Philip Morris International talking about the World Health Organisation who said, this organisation has an extraordinary influence on government and consumers and we must find a way to diffuse this and reorientate the activities to their prescribed mandate. Then it goes on: In addition, we need to think through how we can use our food companies' size, technology and capability with government by helping them with their food problems and giving us a more balanced profile with the government than we now have against the World Health Organisation's powerful influence. It has been very noticeable that the so-called diversification of the tobacco companies has often been into food products, but particularly Philip Morris. Here is a statement of the interaction of the different elements in their conglomerate but also a very clear deliberate wish to divert governments as well as the World Health Organisation. What would you think about that approach as a lawyer?
  (Mr Day) They perceive themselves as executives of any old company selling any old product. It could be widgets or goodness knows what. In their minds they are simply—and I do not know the details of the individual executives—executives of a company selling other products and they are simply doing their best to sell their product. You can see it with Kenneth Clarke's statement in today's Guardian that they are simply a commercial body that is doing its best to sell its products. If that means subverting what the WHO is doing that is a tactical manoeuvre that has been taken. I do not perceive from what I have seen that there is any "morality" about them. They are simply a commercial enterprise that is going about its business selling these products and they may say, "If governments do not like it, well, governments have their role that they can play. Our role is to try and circumvent that to try and ensure that our products continue to be sold." For those of us outside one feels that those guys should have some sort of morality; they should be having sleepless nights. Clearly from my perspective and from what one sees, they do not.

  1213. It is really quite a naked use of power is it not, back in 1988 when they are talking about helping governments with their food problems? My observation is that in the year 2000 governments' worries about food and food policies and food products have increased, not diminished, since 1988. Here we have got this declaration of using a different kind of power in a different field, the food field, in order to get influence with the government or with the World Health Organisation. It does not surprise you that that is the way they approach this?
  (Mr Day) No. The enormous advantage that these companies have got is that if you look at a company like Monsanto, Monsanto were clearly massively damaged by the fact that the British population and indeed populations elsewhere suddenly went off genetically modified food, despite the fact that the government was by and large on its side. Here you have got an instance where you have got the company and its consumers, a very happy group of consumers, consuming away, happy in the sense that they want their daily fix, not happy in the long term consequences but that seems too far into the future, and obviously addicted to their particular product. You have then got government which is trying to get in between. It means that by and large the companies, as long as they can keep on the market these products, they know their consumers slavishly will come along every day and buy their products. All that they have to do is to try and make sure they keep getting round any government regulation, whether it be smuggling, whether it be undermining the WHO. All they want to do is to make sure that, day in, day out, the products are in the tobacconists and that their consumers can get their fix. It is an ideal product in that sense.

  Audrey Wise: Finally, if I can give a quote from an article by Kenneth Clarke in today's Guardian, his preamble to this key passage is all about how dreadful it is that taxes are so high and because you have high taxes on tobacco you cause smuggling, so he wants governments to co-operate with tobacco companies and reduce this incentive to crime. He says: Where any government is unwilling to act or their efforts are unsuccessful, we act, completely within the law, on the basis that our brands will be available alongside those of our competitors in the smuggled, as well as the legitimate, market. He is careful to say "completely within the law" but, as a non-lawyer, I have considerable difficulty with the idea as to how you can act completely within the law when you are making your product available in illegal ways. Do you see as a lawyer any contradiction in the concept of getting your product on to the smuggled market and acting within the law?

  Mr Burns: Far be it from me to argue with my esteemed colleague, but I think her paraphrasing of Kenneth Clarke's article was a little wide of what was actually there.

  Audrey Wise: Which bit are you asking about?

  Mr Burns: Without changing her question can I try and put it a little more in context in that I think, without having spoken to Kenneth Clarke, that what he is basically saying in the extract that was read verbatim is that it is a fact of life that in a smuggled market, although his company will operate completely within the legal framework, there is a situation where a company cannot determine what smugglers are going to smuggle what products and you will find possibly his company's products alongside other brands of cigarettes on the smuggled market.

  1214. Mr Day, you have two versions of the same article. Take your pick.
  (Mr Day) My reading of it is that clearly what he says is that they all operate within the law and I would not challenge that for a single second. What does seem to me to conflict is that that is against his opening two sentences. How can he say that and at the same time say that BAT is a good corporate citizen which maintains high ethical standards? That is for me the crucial point. If you are a shareholder with these companies you are probably delighted, they are doing a brilliant job, selling their products, doing what they can to exploit the market in whatever way that means. As Ken Clarke says here, that may mean at times their products end up being smuggled. His primary line is to say, "We are a commercial enterprise. Our job is to do that." At the same time it is very hard for them to have any sort of "high ethical standard" because for all of us we feel—certainly I feel—that the way they have exploited the Asian markets, the African markets, these emerging markets where by and large either cigarettes were not around or until very recently were not around, or indeed in much shorter supply, the fact that they are encouraging this massive take-up of cigarettes in the Asian and African worlds, where is the high moral line down there? It seems to me it is not there.

  Chairman: His article is very interesting in that it does appear from the evidence we have got that there is a general consensus among tobacco companies that pricing mechanisms which increase the price of products does reduce the consumption. From the health point of view the picture I have got, and maybe I have misunderstood what they said, they are generally supportive of the mechanisms of increasing the price as a disincentive. Kenneth Clarke is a former Chancellor of the Exchequer who actually implemented that mechanism himself and he, also as a former Secretary of State for Health, appears now to disagree. Obviously we will have to explore that with him if he is willing to come before the Committee.

  Audrey Wise: I have been stung. At a previous evidence session, Simon, you did advise witnesses not to cross me.

  Mr Burns: Absolutely.

  Audrey Wise: You clearly do not follow your own advice.

  Chairman: Can you just finish your point, Audrey, and I will bring you in, Simon. We are, by the way, examining a witness, not each other.

  Audrey Wise: I know. I would never want to misrepresent anybody. Apart from anything else it is completely pointless because this article is on public sale and I recommend everybody to buy this morning's Guardian and read it.

  Chairman: Are you on commission?

  Audrey Wise: It does include a quote that too many governments follow a policy of raising tobacco taxes to excessive levels and ignore dramatic tax differentials between neighbouring countries and that smuggling is boosted by every tax change that improves the profit margin for the smugglers. He then complains about the far higher British taxes than those on mainland Europe. I do not think that my paraphrase of the preamble was all that inaccurate or unfair.

  Chairman: Mr Burns has retired quietly into his corner to recover.

  Mr Burns: It is certainly not worth crossing my distinguished colleague.

  1215. You mentioned a bit earlier in your evidence the plight of the Tobacco Research Council which might not be dead but is suffering as much as most heavy smokers. It seems to be in the last stages. I wonder if you could expand a bit on what you said, and let me put a specific question. Why do you think the Tobacco Research Council's work at Harrogate came to so abrupt an end in 1970?
  (Mr Day) It is very clear that the industry originally in the fifties and the sixties thought that there was something that they could do. They thought that they could extract the carcinogen to make the tobacco harmless and that they should be doing that ostensibly. But as time wore on and they looked at more and more possibilities, it became absolutely clear that that was not the case, that there was nothing, apart from getting a totally new substance, that you could do to make smoking harmless. As was said by Imperial, all that happened with this research was that the health community used the material, because by and large as far as I can see they had reasonably good researchers there, honest people who wanted to get this published and out into the public arena, and a lot of it was, and they felt that this was simply being used against them. My argument is that if you are in a big corporate institution like that you have a duty to research your product and to make sure that is made available and that is a continuing obligation, and that again would have been a big debate in trial as to how that obligation continued. But in their view they clearly felt that, not being able to establish the reason that it was set up in the first place, to try and find some way to make it less harmful or originally to show it was not harmful at all, they basically gave up. By the time they gave up in the late seventies a "harmony" had been reached that the immediate shock that your product is killing all these hundreds of thousands of people, the potential of the product being taken off the market, goodness knows what they must have been worrying about in the fifties and sixties but, by the time they got to the mid seventies, harmony had been reached by and large; government was never going to take this drastic step of taking their products off the market; they could live within the confines of any regulator's line that they were going to take and for the last 25 years not much has happened. In terms of the cigarette very little has happened.

  1216. This means that they have not generated very many more documents which they would wish to keep from us?
  (Mr Day) As far as research is concerned, probably one would see numbers of documents coming out as far as addiction is concerned because that was a major issue for them, as to how the addiction worked and all that. On the harm side of it I would be surprised if one saw much coming out after the mid seventies, but on the addiction front it is a different matter.

  1217. You have said already that you felt that Imperial took the lead in kicking off the work. Would you say why you think they took the lead rather than the other companies?
  (Mr Day) They and Philip Morris, as far as my memory of the document goes, were very clear that they wanted this research establishment closed down for that very reason, that it was producing research that was always being leaked by their opponents, and it was Gallaher and Rothman at the time who the ones who were more dove-ish and saying, "Maybe we should be carrying with this as some sort of a wider duty." That reflects the picture that emerged for me all the way along, that Imperial were consistently the ones who were taking the tougher line, that they were demanding that they took action to try and defend their position in a much stronger way than Gallaher.

  1218. Do you think there is any research which has been carried out at the individual company level now which is or would be capable of producing more evidence that could be used in litigation?
  (Mr Day) Highly unlikely. The lessons for them over the last 10 years is that they less they produce the better. By and large there have been very few developments. We have seen the odd debate about a safe cigarette being produced but that has all disappeared back into the mire. I would be very surprised if the last 10 or 12 years anything of any value would have come out. It would be very interesting to see things like what has been going on with their advertising policy, but again I would be surprised if they were not sufficiently sophisticated to keep genuine discussion about those sorts of issues well away from anything on paper.

  1219. We felt that perhaps there was research still going on in the United States with some of the people we talked to.
  (Mr Day) Clearly each of the companies wants to continue to steal a march on the others. One sees the massive rise of Marlboro over the last 30 or 40 years and clearly to an extent there may well be some research that is going on regarding different flavours, but by and large I do not think that is true. In terms of the health side of things, as far as I understand it, it has pretty much gone. There may be the odd bit on addiction, but again the evidence is pretty clear and I would be surprised if they wanted to promote further evidence that gets put into that because debate just encourages more people to work on it. It would be very difficult to get more research into that field these days. My mood would be that there may well be odd bits going on about how they may try and get a competitive advantage but I would be surprised if it was a lot.