Showing posts with label Hoult. Show all posts
Showing posts with label Hoult. Show all posts
Wednesday, 15 January 2014
Day 199: Wet, dull, dreary
Pathetic fallacy, as my grade 9 English teacher described it, was the literary tendency of the weather to mirror the mood. Would false pathos then be the tendency of the mood to mirror the weather?
If so, we can blame the overcast skies and the unseasonable drizzle for what turned out to be a gloomy short week at the Montreal tobacco trials with virtually no bright moments or clear focus.
By noon today, Mr. Peter Hoult had finished his seventh day of testimony - the last three of which were part of JTI-Macdonald's defence against claims of wrongful behaviour by the company during four decades. (Mr. Hoult was a senior executive with the company for five of those years.)
This morning and yesterday afternoon it was the plaintiff's lawyers, André Lespérance and Philippe Trudel, who were putting their cross-examination questions to Mr. Hoult. This was no harsh interrogation: with their disarmingly gentle affect, they both engaged Mr. Hoult in an almost conversational way about the events during his career at RJR-International, including the time he spent in Canada.
This is not the fastest way to get an answer -- especially from a man who doesn't seem inclined to say "yes" or "no" when a paragraph of explanation will do. But it was a successful way to invite this talkative man to extemporize on topics that he may not have fully rehearsed with Doug Mitchell or other JTI-Macdonald lawyers. Some of his off-the-cuff comments - like those where he comfortably acknowledged the way in which lighter toned cigarette packages were known to convey a healthier brand - were unusually frank admissions.
I came away with the feeling that Mr. Hoult's comments this week are as likely to find their way into the plaintiff's closing arguments as they are to the defendants.
What's the information again? Risk? Romance?
Twice Mr. Mitchell had asked for his witness to describe the informational content in RJR/JTI-Macdonald advertisements. The purpose, he said, was to rebut the statement of the plaintiffs' expert witness in advertising that tobacco ads were devoid of information.
Both Mr. Lespérance and Mr. Trudel mimicked this approach, inviting Mr. Hoult to make further comments on other ads. He was shown examples of Export A "A taste for adventure" campaigns that were run when he was president of the company. (Exhibits 1381.39, 1381.40, 1532.5).
Kayaking! Skiing! These were very different ads than the static smoker shown earlier in the week by Mr. Mitchell. (Mr. Hoult explained that the selection of documents was not made by him).
Nonetheless, Mr. Hoult saw them as sending "not an entirely different message ... The theme of the trucker was the great outdoors – this is exactly the same thing.... it's an enrichment of the message." He did not agree with Mr. Lespérance that these ads promoted health. "They are promoting a vigorous, adventurous activity outdoors."
But what of the request made by the health minister in 1977 that the companies' take note of his "special concern about the association of cigarette smoking with any pursuit that requires a high degree of fitness," and the "inherent incompatibility between smoking and sports generally." (Exhibit 1558) Mr. Hoult said he was "totally unaware" of this request - even though he had earlier testified about extensive briefings about constraints on marketing in Canada.
Nonetheless, he did not share the minister's concerns. "I know many people who smoke and play soccer – and I did myself." Besides kayaking and skiing "are not sports in the conventional sense – they are more activities. I don’t think you necessarily require a high degree of fitness to indulge in these activities." Nor did he think that skiing was risky:
When, much later, Mr. Trudel asked him whether or not the Macdonald Select ad did not associate smoking with romance, Mr. Hoult agreed that it did. But not in a way that offended CTMC rule number 8 that forbid promoting a brand as an "essential" element of romance.
Health information too
Although all of the advertisements shown had health warning messages, Mr. Hoult not once identified the information conveyed in the ads to include a caution about the consequences of using the product!
But he acknowledged that the ads did contain health-related information. "Both these packs are white. White communicates lightness - dark colours the opposite... At a more specific level, the name on the packs is in different colours: one is red, a milder, fuller flavour; blue is cooler and menthol is traditionally associated with green"
"We knew from our research on many occasions that this association [between strength of cigarette and harmfulness] was there - that lighter cigarettes were better for you because they were lower in tar and nicotine."
Mr. Hoult said that he felt the company had no responsibility to further communicate the risks of smoking. These were "totally understood" 'It was perceived throughout Canada, among the general population, that cigarette smoking was a risk. even stronger than that – that cigarettes kill you."
Moreover, the government was "vigorously" communicating the dangers, and with its greater credibility the work was "being carried out more effectively than if we had done it ourselves."
Not concerned with communicating to youth
To this outsider, a curious idiosyncrasy of the trial process is the gauntlet that has to be run to establish something as a fact, even when it is something that would be considered authoritative in another source.
Mr. Hoult's presence -- and the fact that one of the documents introduced by the defendants made reference to Print Measurement Bureau figures -- was the device that Mr. Lespérance needed to put on record how many Quebec youngsters would have seen tobacco ads that were promoted in the satirical monthly, CROC. (Exhibit 1675, 1676-2M).
As he was taken through the calculations of the Prime Measurement Bureau, Mr. Hoult acknowledged that one-quarter of the readership of the magazine were youngsters aged 12-17, and that 1 in 5 Quebecers in that age range read the magazine.
This did not, however, concern him. "I certainly acknowledge that the magazines would reach these people... Now, whether the numbers are large or small is not the issue of concern."
"When I say 'of no concern,' I have to say, without sounding irresponsible, that I don't believe that exposure to advertising to these people that you've talked about, these under eighteen-year-olds, is the factor in ...causing them to smoke." He cited other factors - like peer pressure and parental attitudes.
Covering up (ventilation holes)
From his answers, it would appear that Mr. Hoult had not been rehearsed to answer questions about the decision of RJR-Macdonald to put ventilation holes on its cigarettes so close to the end that they were potentially blocked by the lips of smokers. Given the large number of documents on the trial record about concerns with his company's brands, this seems like an odd oversight.
Even before Mr. Hoult began working at RJR-Macdonald, senior officials at Health Canada had written the CTMC to request that the companies take on the "manufacturer's responsibility to inform his customers" about the potential of lip blocking to make the tar and nicotine values on the package misleading. (Exhibit 50014)
Mr. Hoult said today that he was unaware of the request -- and suggested that the companies would not have acted on it unless there had been a series of meetings and discussions with the government first. It certainly was "not enough" for the government to merely ask.
In the mid 1980s, Imperial Tobacco had found that Export A Light cigarettes were the Canadian brand with the holes closest to the lips. (Exhibit 285). Mr. Hoult, who was not in Canada at that time, had no recollection of that complaint, and agreed that, if the facts were valid, the values on their packages of cigarettes would be rendered meaningless.
Perhaps he did not realize that he was being set up to comment on another old exhibit at this trial (Exhibit 626) in which the senior RJR-Macdonald scientist complained of resistance to the movement of the holes, or to changes to the measurement method that would overcome this design advantage . "I was unable to change the attitude of Senior Management, to a lengthening of the filter and moving the holes further away from the mouth end to prevent lip coverage of the first or even the first and second line of holes."
An earlier memo pinned the decision on Mr. Hoult as a member of the reluctant senior managers. "PJH, yourself and myself decided to let this particular positioning of the holes continue... unless a major issue came of it (in which case we would plead lack of realisation of a problem)." (Exhibit 623).
If so, we can blame the overcast skies and the unseasonable drizzle for what turned out to be a gloomy short week at the Montreal tobacco trials with virtually no bright moments or clear focus.
By noon today, Mr. Peter Hoult had finished his seventh day of testimony - the last three of which were part of JTI-Macdonald's defence against claims of wrongful behaviour by the company during four decades. (Mr. Hoult was a senior executive with the company for five of those years.)
This morning and yesterday afternoon it was the plaintiff's lawyers, André Lespérance and Philippe Trudel, who were putting their cross-examination questions to Mr. Hoult. This was no harsh interrogation: with their disarmingly gentle affect, they both engaged Mr. Hoult in an almost conversational way about the events during his career at RJR-International, including the time he spent in Canada.
This is not the fastest way to get an answer -- especially from a man who doesn't seem inclined to say "yes" or "no" when a paragraph of explanation will do. But it was a successful way to invite this talkative man to extemporize on topics that he may not have fully rehearsed with Doug Mitchell or other JTI-Macdonald lawyers. Some of his off-the-cuff comments - like those where he comfortably acknowledged the way in which lighter toned cigarette packages were known to convey a healthier brand - were unusually frank admissions.
I came away with the feeling that Mr. Hoult's comments this week are as likely to find their way into the plaintiff's closing arguments as they are to the defendants.
What's the information again? Risk? Romance?
Twice Mr. Mitchell had asked for his witness to describe the informational content in RJR/JTI-Macdonald advertisements. The purpose, he said, was to rebut the statement of the plaintiffs' expert witness in advertising that tobacco ads were devoid of information.
Kayaking! Skiing! These were very different ads than the static smoker shown earlier in the week by Mr. Mitchell. (Mr. Hoult explained that the selection of documents was not made by him).
Nonetheless, Mr. Hoult saw them as sending "not an entirely different message ... The theme of the trucker was the great outdoors – this is exactly the same thing.... it's an enrichment of the message." He did not agree with Mr. Lespérance that these ads promoted health. "They are promoting a vigorous, adventurous activity outdoors."
But what of the request made by the health minister in 1977 that the companies' take note of his "special concern about the association of cigarette smoking with any pursuit that requires a high degree of fitness," and the "inherent incompatibility between smoking and sports generally." (Exhibit 1558) Mr. Hoult said he was "totally unaware" of this request - even though he had earlier testified about extensive briefings about constraints on marketing in Canada.
Nonetheless, he did not share the minister's concerns. "I know many people who smoke and play soccer – and I did myself." Besides kayaking and skiing "are not sports in the conventional sense – they are more activities. I don’t think you necessarily require a high degree of fitness to indulge in these activities." Nor did he think that skiing was risky:
Health information too
Although all of the advertisements shown had health warning messages, Mr. Hoult not once identified the information conveyed in the ads to include a caution about the consequences of using the product!
But he acknowledged that the ads did contain health-related information. "Both these packs are white. White communicates lightness - dark colours the opposite... At a more specific level, the name on the packs is in different colours: one is red, a milder, fuller flavour; blue is cooler and menthol is traditionally associated with green"
"We knew from our research on many occasions that this association [between strength of cigarette and harmfulness] was there - that lighter cigarettes were better for you because they were lower in tar and nicotine."
Mr. Hoult said that he felt the company had no responsibility to further communicate the risks of smoking. These were "totally understood" 'It was perceived throughout Canada, among the general population, that cigarette smoking was a risk. even stronger than that – that cigarettes kill you."
Moreover, the government was "vigorously" communicating the dangers, and with its greater credibility the work was "being carried out more effectively than if we had done it ourselves."
Not concerned with communicating to youth
Mr. Hoult's presence -- and the fact that one of the documents introduced by the defendants made reference to Print Measurement Bureau figures -- was the device that Mr. Lespérance needed to put on record how many Quebec youngsters would have seen tobacco ads that were promoted in the satirical monthly, CROC. (Exhibit 1675, 1676-2M).
As he was taken through the calculations of the Prime Measurement Bureau, Mr. Hoult acknowledged that one-quarter of the readership of the magazine were youngsters aged 12-17, and that 1 in 5 Quebecers in that age range read the magazine.
This did not, however, concern him. "I certainly acknowledge that the magazines would reach these people... Now, whether the numbers are large or small is not the issue of concern."
"When I say 'of no concern,' I have to say, without sounding irresponsible, that I don't believe that exposure to advertising to these people that you've talked about, these under eighteen-year-olds, is the factor in ...causing them to smoke." He cited other factors - like peer pressure and parental attitudes.
Covering up (ventilation holes)
From his answers, it would appear that Mr. Hoult had not been rehearsed to answer questions about the decision of RJR-Macdonald to put ventilation holes on its cigarettes so close to the end that they were potentially blocked by the lips of smokers. Given the large number of documents on the trial record about concerns with his company's brands, this seems like an odd oversight.
Even before Mr. Hoult began working at RJR-Macdonald, senior officials at Health Canada had written the CTMC to request that the companies take on the "manufacturer's responsibility to inform his customers" about the potential of lip blocking to make the tar and nicotine values on the package misleading. (Exhibit 50014)
Mr. Hoult said today that he was unaware of the request -- and suggested that the companies would not have acted on it unless there had been a series of meetings and discussions with the government first. It certainly was "not enough" for the government to merely ask.
In the mid 1980s, Imperial Tobacco had found that Export A Light cigarettes were the Canadian brand with the holes closest to the lips. (Exhibit 285). Mr. Hoult, who was not in Canada at that time, had no recollection of that complaint, and agreed that, if the facts were valid, the values on their packages of cigarettes would be rendered meaningless.
Perhaps he did not realize that he was being set up to comment on another old exhibit at this trial (Exhibit 626) in which the senior RJR-Macdonald scientist complained of resistance to the movement of the holes, or to changes to the measurement method that would overcome this design advantage . "I was unable to change the attitude of Senior Management, to a lengthening of the filter and moving the holes further away from the mouth end to prevent lip coverage of the first or even the first and second line of holes."
An earlier memo pinned the decision on Mr. Hoult as a member of the reluctant senior managers. "PJH, yourself and myself decided to let this particular positioning of the holes continue... unless a major issue came of it (in which case we would plead lack of realisation of a problem)." (Exhibit 623).
Covering up (document tampering?)
Mr. Hoult had opened his testimony on Monday by clarifying that he had never intended to suggest that RJR-Macdonald had "purged" its records of references to young people.
In response to Mr. Lespérance's questions (and Exhbits 656 and 656 A which leave a very different impression), Mr. Hoult further clarified that there was no special effort to cleanse the records of references to young people. "I was talking about all documents, not just under age smokers. Purging as we defined it took place in all companies – simply getting rid of information ."
Documents, in this business, sometimes "speak for themselves." Ah, but how to interpret those that have been extinguished?
Balls in the air
A few hints were floated this week about the road ahead:
In response to Mr. Lespérance's questions (and Exhbits 656 and 656 A which leave a very different impression), Mr. Hoult further clarified that there was no special effort to cleanse the records of references to young people. "I was talking about all documents, not just under age smokers. Purging as we defined it took place in all companies – simply getting rid of information ."
Documents, in this business, sometimes "speak for themselves." Ah, but how to interpret those that have been extinguished?
Balls in the air
A few hints were floated this week about the road ahead:
- Mr. Lespérance reported yesterday that he anticipates two weeks' of trial in "counter-proof" and that he intends to call a small number of experts at that time. One who will be new to the trial is Professor Paul Slovic.
- A motion to amend the pleadings is in the offing -- Imperial Tobacco seems to think it is more contentious than Justice Riordan seems to.
- The "admissions" which Imperial Tobacco is seeking to avoid Simon Potter testifying have yet to be agreed to. This too may require more court time.
Tuesday, 14 January 2014
Day 198: The Prime Prospect
During Mr. Peter Hoult's sixth day of testimony at the Montreal tobacco trials, the pace mercifully picked up a bit.
It may have had nothing to do with Justice Riordan's obvious impatience yesterday, but today JTI-Macdonald counsel, Doug Mitchell, kept his witness far more focused on specific documents and specific events. As a result, it was easier to follow the arch of the counter-narrative that he was trying to establish.
(JTI-Macdonald's legal team has focused more than the others on providing alternative explanations to the documents that have been used as evidence of the company's wrongdoings. Mr. Hoult is the third company marketer brought by the defence for this purpose - Mr. Robin Robb and Mr. Lance Newman testified last November.)
As I understood it, Mr. Hoult's testimony was aimed at establishing that the marketing activities of the company were not to recruit non-smokers, to discourage quitting or to diminish concerns about the health risks of smoking.
He explained that they could instead be seen as the appropriate actions of skilled marketers when operating in a highly competitive tobacco market. In this sink-or-swim environment, the company used modern segmentation techniques to find ways to match their products with the needs and desires of their Prime Prospects. These would-be customers were always adults over 18 who were already smokers.
Peter Hoult - one witness among many former presidents
Mr. Hoult's experience is being given a disproportionate hearing in this trial. (By the time he leaves this week, he will have testified for 7 days). Only one other president of this company has been invited, although others have testified posthumously through their written records.
Attempts to save Export A
Much of the morning was spent in detailed questions about the development, launch and redesign of the expanded suite of Export brands: - Export A (filter), Export A Light, Export A Medium and Export A Mild.
Of the 80 or so new documents introduced by this witness (which are numbered as Exhibits 40418 to 40492), more than half seem to relate to Export A marketing efforts - strategic plans, market research, advertising copy, etc.
In his explanation of the efforts to stop the "haemorrhaging" of clients from Export A to Players' Light, Mr. Hoult elaborated on the minutiae of marketing that is by now very familiar to this trial. His presentation also reinforced the impression that those who directed these efforts were detached from the controversies of their business, and from the impact of it on the lives of the men (and women) whose custom they sought. The "needs and desires" of smokers, as Mr. Hoult described them, were always and only for a more suitable cigarette brand.
The needs of the company appeared similarly uni-dimensional: the bottom line in Mr. Hoult's world was the bottom line.
When asked by Mr. Mitchel to estimate the value of the small market shares that were sometimes pursued, Mr. Hoult estimated that a 1% share of the market in 1980 was worth about $8.5 million in net revenues, and about $1.5 million in profits. (Exhibit 40476). By my calculation, that would put the profits from the entire market in 1980 at the equivalent of $400 million in today's dollars, but I have seen estimates of the industry's profits in subsequent years that were very much higher.
Small brands (like Macdonald Select) were worth saving, and big brands (like Export A Lights) were worth pursuing. Despite being a risk averse company in a risk averse industry, the marketing department was prepared to tinker with modestly successful brands if they thought doing so would increase market share.
There were, however, brands that Mr. Hoult was reluctant to pursue or which received scant attention. The American brands sold by the company - Winston, Salem and Camel - were distributed without any real marketing support. And when his American owners wanted to launch a test market for the Premier heat-not-burn cigarette, Mr. Hoult dragged his feet. "It was very clear to me that the product would not succeed..... the flavour was awful - the aroma was acrid."
Advertising: necessary, informative, boring.
Mr. Hoult's views on advertising were mixed. On the one hand, he attributed restraints on advertising as the reason that he was unable to reach the desired sales objectives for some of his brands. The cap on advertising expenditures imposed by the CTMC meant that he had to divide a small pie among several internal needs.
At the same time, he suggested that advertising was not such a powerful marketing force. "The biggest challenge is to get interest and get attention... Cigarettes are not the most interesting product, even for smokers. ... In the main, advertising is quite boring."
He repeated the exercise of identifying the information content for certain Export A advertisements (Exhibit 40479). "These are successful executions of the brand position," he said. "They do reflect the target needs and wants. They do reflect those product benefits that we have determined from the research."
Not only was the imagery linked across the ads, it "communicated to the consumer that mild is slightly fuller flavor and slightly more satisfaction than light."
Always following the rules
Mr. Hoult began his testimony yesterday by clarifying the record from his first appearance at the trial in the fall of 2012. Despite how it might have appeared, he wanted to make sure that Justice Riordan understod that "there was no editing of [internal reports] of any sort .... We never did research on young people under the age of eighteen." ... "There would be no use for that research, because we didn't market to people under eighteen."
He was given further opportunities today to stress how compliant the company was with the CTMC code, and how it obliged its advertising suppliers to respect these rules. (Exhibits 40484 and 40482). Complaints about compliance were few, and if errors were ever made, they were usually caught by their competitors.
But trying to prevent any new rules
During his testimony in 2012, Mr. Hoult had been asked about the involvement of American officials in the company's attempts to prevent Canada's first tobacco ad ban from coming into law. The documents presented certainly gave the impression that it was the American strategists who were calling the shots in that lobbying effort.
Eighteen months later, Mr. Mitchell asked his witness to present a different account of these events. Mr. Hoult described how his return to Canada in 1987 coincided with the introduction of bill C-51, which had come as a shock and a surprise to the industry.
Defeat had been snatched from the jaws of the victory they expected in arriving at a new voluntary agreement with Minister Epp. He suggested that the abandonment of this effort and the introduction of a law was politically motivated, and was aimed more at pre-empting the success of a competing private member's bill. "The prize would otherwise be taken out from under his nose."
Mr. Hoult was further dismayed that his counterparts in the other companies looked like they were willing to let it happen. His first encounter with the other presidents was to discuss the proposed law: "I drew the conclusion that the CTMC would probably not do anything about it... This bill would be passed without any opposition at all."
He attributed this attitude to the fact that the CTMC was dominated by the views of Imperial Tobacco (which also provided most of the funds for CTMC activitie). The other companies were steadily losing customers to Imperial Tobacco. In an environment without advertising, Mr. Hoult felt this momentum would continue and that the new law would benefit the larger company.
His decision to call in reinforcements from his U.S. firm was the catalyst for Imperial Tobacco to resist the law: "It couldn’t allow a small company to take the lead."
The CTMC invited natural allies to join this effort - "other interested partners – unions, retail trade, and advertising agencies." They did not directly mobilize smokers, but "an embryonic smokers' rights association" was funded to present the views of smokers to government. ("I can't remember whether they approached us or we approached them.")
All of this was proper behaviour, he said. "In Canada, as in other democracies, you have MPs, you have governments, and you are expected to express your case to them." His goal was never to delay the bill, but to modify it "so it was somewhat more reasonable."
Fleeting success
Mr. Hoult had no trouble identifying several accomplishments of his tenure as vice-president of marketing at RJR-Macdonald between 1979 and 1983. "We stabilized that steep decline" in Export A market share, introduced two new brands, and respositioned Export A lights. "I would say I was pleased with what we did."
There were flashes of ego as he described what happened to the company in the four years between his departure as VP-marketing (1983) and his arrival as president (1987). The company was further behind when he returned as president only four years later. (Exhibit 40486). "We had slipped from the peak position to one which was very close to the one when I arrived." Even in the Maritimes and Quebec, where it had traditionally been strong, the company was seeing its market share shrink year over year.
Moreover, the whole industry was now facing a challenge. "The writing was on the wall. In the course of the next five years we would be talking of an industry with declining volume."
Mr. Hoult described enormous efforts to fight for market share, and to fight back against laws that threatened industry activity. But towards the threats that faced the entire sector, he seemed resigned to defeat. "There was nothing we could do. There was nothing we did."
By the mid-day break, Mr. Mitchell had finished his questions for Mr. Hoult. The cross-examination, which began this afternoon, will be reported tomorrow.
Mr. Hoult's last day of testimony will be tomorrow. On Monday the iconoclastic Kip Viscusi will testify as an expert on warnings.
It may have had nothing to do with Justice Riordan's obvious impatience yesterday, but today JTI-Macdonald counsel, Doug Mitchell, kept his witness far more focused on specific documents and specific events. As a result, it was easier to follow the arch of the counter-narrative that he was trying to establish.
(JTI-Macdonald's legal team has focused more than the others on providing alternative explanations to the documents that have been used as evidence of the company's wrongdoings. Mr. Hoult is the third company marketer brought by the defence for this purpose - Mr. Robin Robb and Mr. Lance Newman testified last November.)
As I understood it, Mr. Hoult's testimony was aimed at establishing that the marketing activities of the company were not to recruit non-smokers, to discourage quitting or to diminish concerns about the health risks of smoking.
He explained that they could instead be seen as the appropriate actions of skilled marketers when operating in a highly competitive tobacco market. In this sink-or-swim environment, the company used modern segmentation techniques to find ways to match their products with the needs and desires of their Prime Prospects. These would-be customers were always adults over 18 who were already smokers.
Peter Hoult - one witness among many former presidents
Mr. Hoult's experience is being given a disproportionate hearing in this trial. (By the time he leaves this week, he will have testified for 7 days). Only one other president of this company has been invited, although others have testified posthumously through their written records.
Attempts to save Export A
Much of the morning was spent in detailed questions about the development, launch and redesign of the expanded suite of Export brands: - Export A (filter), Export A Light, Export A Medium and Export A Mild.
Of the 80 or so new documents introduced by this witness (which are numbered as Exhibits 40418 to 40492), more than half seem to relate to Export A marketing efforts - strategic plans, market research, advertising copy, etc.
In his explanation of the efforts to stop the "haemorrhaging" of clients from Export A to Players' Light, Mr. Hoult elaborated on the minutiae of marketing that is by now very familiar to this trial. His presentation also reinforced the impression that those who directed these efforts were detached from the controversies of their business, and from the impact of it on the lives of the men (and women) whose custom they sought. The "needs and desires" of smokers, as Mr. Hoult described them, were always and only for a more suitable cigarette brand.
The needs of the company appeared similarly uni-dimensional: the bottom line in Mr. Hoult's world was the bottom line.
When asked by Mr. Mitchel to estimate the value of the small market shares that were sometimes pursued, Mr. Hoult estimated that a 1% share of the market in 1980 was worth about $8.5 million in net revenues, and about $1.5 million in profits. (Exhibit 40476). By my calculation, that would put the profits from the entire market in 1980 at the equivalent of $400 million in today's dollars, but I have seen estimates of the industry's profits in subsequent years that were very much higher.
Small brands (like Macdonald Select) were worth saving, and big brands (like Export A Lights) were worth pursuing. Despite being a risk averse company in a risk averse industry, the marketing department was prepared to tinker with modestly successful brands if they thought doing so would increase market share.
There were, however, brands that Mr. Hoult was reluctant to pursue or which received scant attention. The American brands sold by the company - Winston, Salem and Camel - were distributed without any real marketing support. And when his American owners wanted to launch a test market for the Premier heat-not-burn cigarette, Mr. Hoult dragged his feet. "It was very clear to me that the product would not succeed..... the flavour was awful - the aroma was acrid."
Mr. Hoult's views on advertising were mixed. On the one hand, he attributed restraints on advertising as the reason that he was unable to reach the desired sales objectives for some of his brands. The cap on advertising expenditures imposed by the CTMC meant that he had to divide a small pie among several internal needs.
At the same time, he suggested that advertising was not such a powerful marketing force. "The biggest challenge is to get interest and get attention... Cigarettes are not the most interesting product, even for smokers. ... In the main, advertising is quite boring."
 |
| Exhibit 40479 |
Not only was the imagery linked across the ads, it "communicated to the consumer that mild is slightly fuller flavor and slightly more satisfaction than light."
Always following the rules
Mr. Hoult began his testimony yesterday by clarifying the record from his first appearance at the trial in the fall of 2012. Despite how it might have appeared, he wanted to make sure that Justice Riordan understod that "there was no editing of [internal reports] of any sort .... We never did research on young people under the age of eighteen." ... "There would be no use for that research, because we didn't market to people under eighteen."
He was given further opportunities today to stress how compliant the company was with the CTMC code, and how it obliged its advertising suppliers to respect these rules. (Exhibits 40484 and 40482). Complaints about compliance were few, and if errors were ever made, they were usually caught by their competitors.
But trying to prevent any new rules
During his testimony in 2012, Mr. Hoult had been asked about the involvement of American officials in the company's attempts to prevent Canada's first tobacco ad ban from coming into law. The documents presented certainly gave the impression that it was the American strategists who were calling the shots in that lobbying effort.
Eighteen months later, Mr. Mitchell asked his witness to present a different account of these events. Mr. Hoult described how his return to Canada in 1987 coincided with the introduction of bill C-51, which had come as a shock and a surprise to the industry.
Defeat had been snatched from the jaws of the victory they expected in arriving at a new voluntary agreement with Minister Epp. He suggested that the abandonment of this effort and the introduction of a law was politically motivated, and was aimed more at pre-empting the success of a competing private member's bill. "The prize would otherwise be taken out from under his nose."
Mr. Hoult was further dismayed that his counterparts in the other companies looked like they were willing to let it happen. His first encounter with the other presidents was to discuss the proposed law: "I drew the conclusion that the CTMC would probably not do anything about it... This bill would be passed without any opposition at all."
He attributed this attitude to the fact that the CTMC was dominated by the views of Imperial Tobacco (which also provided most of the funds for CTMC activitie). The other companies were steadily losing customers to Imperial Tobacco. In an environment without advertising, Mr. Hoult felt this momentum would continue and that the new law would benefit the larger company.
His decision to call in reinforcements from his U.S. firm was the catalyst for Imperial Tobacco to resist the law: "It couldn’t allow a small company to take the lead."
The CTMC invited natural allies to join this effort - "other interested partners – unions, retail trade, and advertising agencies." They did not directly mobilize smokers, but "an embryonic smokers' rights association" was funded to present the views of smokers to government. ("I can't remember whether they approached us or we approached them.")
All of this was proper behaviour, he said. "In Canada, as in other democracies, you have MPs, you have governments, and you are expected to express your case to them." His goal was never to delay the bill, but to modify it "so it was somewhat more reasonable."
Fleeting success
Mr. Hoult had no trouble identifying several accomplishments of his tenure as vice-president of marketing at RJR-Macdonald between 1979 and 1983. "We stabilized that steep decline" in Export A market share, introduced two new brands, and respositioned Export A lights. "I would say I was pleased with what we did."
There were flashes of ego as he described what happened to the company in the four years between his departure as VP-marketing (1983) and his arrival as president (1987). The company was further behind when he returned as president only four years later. (Exhibit 40486). "We had slipped from the peak position to one which was very close to the one when I arrived." Even in the Maritimes and Quebec, where it had traditionally been strong, the company was seeing its market share shrink year over year.
Moreover, the whole industry was now facing a challenge. "The writing was on the wall. In the course of the next five years we would be talking of an industry with declining volume."
Mr. Hoult described enormous efforts to fight for market share, and to fight back against laws that threatened industry activity. But towards the threats that faced the entire sector, he seemed resigned to defeat. "There was nothing we could do. There was nothing we did."
By the mid-day break, Mr. Mitchell had finished his questions for Mr. Hoult. The cross-examination, which began this afternoon, will be reported tomorrow.
Mr. Hoult's last day of testimony will be tomorrow. On Monday the iconoclastic Kip Viscusi will testify as an expert on warnings.
Monday, 13 January 2014
Day 197: Peter Hoult holds forth
The third calendar year of the Montreal Tobacco Trials opened this morning -- not with a bang but a whimper.
Any suspicions that the tobacco companies might have chosen today to reveal a new trick up their sleeves were dispelled by the absence from their benches of the team leaders. It sometimes happens that after a prolonged break something seemingly urgent is offered for debate. But when the commanders-in-chief of the legal teams for the three companies on trial are missing from the room, it's a safe bet that there will be little excitement in the day.
True enough, there were references to motions that had been drafted and exchanged during the break (but which were not made public). But there was no appetite to schedule them for a debate this week, let alone to hash them out today. More on these issues as details become available.
The return of Mr. Peter Hoult
With issues going back 50 years or more under review, memory is an important faculty in this trial. I was able to consider my own shortcomings in this area over the past few weeks as I struggled to recall details of the previous appearance of former RJR-Macdonald president, Peter J. Hoult in anticipation for his return today. Mr. Hoult first testified in 2012 on September 27 October 1 October 3 and October 4.
My memory may be good, but it's short! Even the picture from Mr. Hoult's Crunchbase profile didn't trigger a good recall of the man. (This morning I was able to see that while it is a nice enough photo, it is not a very good likeness).
It was a short scroll through the Legacy database that gave me the reminder I needed. It turns out that after the barbarians at the gate gave Mr. Hoult the heave-ho in 1989 he was considered by BAT for a position within its ranks. Headhunters collected information about Mr. Hoult and met with him before providing BAT with a description that remains true 23 years later:
Shorter than average height, glasses, energetic and talkative . Considers wide ranging issues before responding to questions, and tends to 'set the scene' for his specific answers.
How diplomatically put! Soon after Mr. Hoult began to display his capacity to "set the scene" with long-winded, repetitive and boring answers the whimpering truly began. Even the observers from JTI sought their escape well before the day was over.
Peter Hoult vs. Richard Pollay.
After many months away from this courtroom, JTI-Macdonald counsel Mr. Doug Mitchell returned today to lead the questions to Mr. Hoult.
JTI-Macdonald is principally the client of the law firm Borden Ladner Gervais, but the boutique firm where Mr. Mitchell practices, Irving Mitchell and Kalichman, is called on to handle certain witnesses. There is a certain logic to Mr. Mitchell managing this task with Mr. Hoult and to Catherine McKenzie assisting him in it. Mr. Mitchell was part of a similar presentation by this witness before Justice Jean-Jude Chabot during the industry's constitutional challenge to the Tobacco Products Control Act in 1989, and both were involved in the trial of the Tobacco Act in the following decade.
On that occasion, RJR-Macdonald's lawyers used Mr. Hoult's testimony to rebut the expert views of Richard Pollay. It soon became clear that the same goal was in Mr. Mitchell's mind today.
"If you listen to Richard Pollay, you will think that tobacco company does marketing different than other companies," Mr. Mitchell gave as a reason for Mr. Hoult's long explanations about market research at Unilever and Schlackman International, where he once worked.
"If you go through Richard Pollay's report, only 'big bad tobacco companies' engage in that marketing," he said to justify asking Mr. Hoult his views on the marketing practices of government tobacco monopolies in France and Spain.
A somewhat shortened leash and a disgruntled judge.
The problem for Mr. Mitchell was that today Justice Riordan seemed disinclined to allow this fact witness to play the role of an expert. Quite firmly, the judge reminded him that the industry's own marketing experts would be available to respond to Mr. Pollay, but that Mr. Hoult had not been qualified to do so.
The lawyer might be forgiven for having prepared his questions thinking that he would get away with stretching the boundary as others have been permitted to. (Jeffrey Gentry and Graham Read are two prominent examples of Justice Riordan's latitude in allowing de-facto expert testimony from fact witnesses).
Although he ultimately allowed most questions to flow, Justice Riordan made it clear that he thought Doug Mitchell should do a better job of toeing the line. "You are way into an expert's realm... the objection [of plaintiff lawyer Philippe Trudel] is not without great merit."
As Doug Mitchell plowed on with his line of questions, the judge's body language echoed his impatience. By turns his chin was propped up on his fist, or his body angled back in his chair. Today is the first day in this trial that my notes show the judge stifling a yawn and looking pointedly at the clock mid-afternoon.
Perhaps repetition is not always the soul of persuasion
Although Peter Hoult was once president of RJR-Macdonald (1987-88), it was his role as head of the marketing department (1979-1983) that were the focus of Mr. Mitchell's questions today. He is thus the third JTI-Macdonald witness to be brought in to comment on the marketing practices in the company.
The first two testified two months ago. Robin Robb was a contemporary of Mr. Hoult's at the company, working in the marketing department from 1978-1984. Mr. Lance Newman started at RJR-Macdonald in 1992 and is still there.
These three men tell remarkably similar stories of arriving at the company with backgrounds in consumer product goods and of using a "market-oriented" or "market-driven" approach to try to save the Export A brand from the marketing mistakes of their predecessors. The presence of all three at this trial seems designed to establish that RJR/JTI-Macdonald marketed its cigarettes no differently than it would have done laundry soap or toothpaste.
Coming at the end of this train, Mr. Hoult seems to have little new to offer. If anything his chorus of I came, I saw, I set about fixing the Export A image only drew attention to the conflicts between the three marketers' views about what were good or bad approaches.
Mr. Newman, for example, testified last November 21st about the "sleepless nights" he experienced trying to overcome the working-class trucker image of the Export A brand. Mr. Robb had similarly testified about trying to wrest the brand from the stodgy "traditional and reliable" image his predecessors had given the brand, and how important it had been to remove the truck from the picture.
But today, Mr. Hoult described how his efforts to give the brand its trucker images was a success!
The shift happened as part of his own "last chance" efforts to save the Export A brand from the mistakes of his predecessors. Upon arriving at the company in 1979 he set about "to fix the Export A problem" by applying the marketing approaches he had learned at Unilever and William Schlackman Ltd before joining RJ-Reynolds International.
Mr. Hoult responded to research that found the Export 'A' smoker to be a man without ambition ("does not aspire to be anything other than a blue collar worker,") but with a desire to get out from under his boss. ("the one added dimension that would increase his satisfaction would be if a greater dimension of freedom or independence was super-imposed on his work situation.") (Exhibit 40247).
Out went depictions of men smoking in quiet contemplation! In came depictions of men at work in independent settings, like logging or trucking.
His successor may have lost sleep over the result, but Mr. Hoult still considers the results to be successful. At the very least, in his imagery the Export A smoker "certainly doesn’t have a dalmation dog!"
Export A ads before and after Mr. Hoult's influence: 1974 (top), 1979, 1980, 1981 (bottom) - Exhibits 40419, 40420, 40436, 40463
Priority 1: Lowest
In addition to giving life-support to Export A, Mr. Hoult was also tasked in his earlier years with the company with the development of new brand families. Today, he spoke of the work to develop Macdonald Select, which he said was intended to beg the lowest tar offering at the time. (Exhibit 40432).
Unlike Export A and its working-class clientele, this was a brand that would be smoked by "contemporary, highly aware, intelligent, self-assured cosmopolitan" people.
Great attention was paid to the development of the package, which had to reflect that the users would be "introspective, intelligent and proud of their decision." The result was a package that was mostly white - Mr. Hoult explained that "white does communicate in a cigarette market a lighter cigarette than the darker richer hues."
Other package elements, gave the brand "connotations of desirable choice." The crest was identified as a way to symbolize quality and prestige. The cigarettes themselves had designs that were "elaborate and expensive."
Mr. Hoult was asked to rebut Mr. Pollay's testimony that tobacco advertising essentially contained no real information by describing the informational content of the Macdonald Select advertisement. (Exhibit 40480, shown above).
He saw a lot of information contained with in it - and for several minutes was able to hold forth on the ways in which the ad provided information about the qualities of the cigarette, the discriminating taste and aspirations of those who buy it, the reputation of the manufacturer. "I think there is an enormous amount of information in here." Oh, my.
Mr. Hoult's testimony will continue on Tuesday and Wednesday. The trial will not sit on Thursday.
Any suspicions that the tobacco companies might have chosen today to reveal a new trick up their sleeves were dispelled by the absence from their benches of the team leaders. It sometimes happens that after a prolonged break something seemingly urgent is offered for debate. But when the commanders-in-chief of the legal teams for the three companies on trial are missing from the room, it's a safe bet that there will be little excitement in the day.
True enough, there were references to motions that had been drafted and exchanged during the break (but which were not made public). But there was no appetite to schedule them for a debate this week, let alone to hash them out today. More on these issues as details become available.
The return of Mr. Peter Hoult
With issues going back 50 years or more under review, memory is an important faculty in this trial. I was able to consider my own shortcomings in this area over the past few weeks as I struggled to recall details of the previous appearance of former RJR-Macdonald president, Peter J. Hoult in anticipation for his return today. Mr. Hoult first testified in 2012 on September 27 October 1 October 3 and October 4.
My memory may be good, but it's short! Even the picture from Mr. Hoult's Crunchbase profile didn't trigger a good recall of the man. (This morning I was able to see that while it is a nice enough photo, it is not a very good likeness).It was a short scroll through the Legacy database that gave me the reminder I needed. It turns out that after the barbarians at the gate gave Mr. Hoult the heave-ho in 1989 he was considered by BAT for a position within its ranks. Headhunters collected information about Mr. Hoult and met with him before providing BAT with a description that remains true 23 years later:
Shorter than average height, glasses, energetic and talkative . Considers wide ranging issues before responding to questions, and tends to 'set the scene' for his specific answers.
How diplomatically put! Soon after Mr. Hoult began to display his capacity to "set the scene" with long-winded, repetitive and boring answers the whimpering truly began. Even the observers from JTI sought their escape well before the day was over.
Peter Hoult vs. Richard Pollay.
After many months away from this courtroom, JTI-Macdonald counsel Mr. Doug Mitchell returned today to lead the questions to Mr. Hoult.
JTI-Macdonald is principally the client of the law firm Borden Ladner Gervais, but the boutique firm where Mr. Mitchell practices, Irving Mitchell and Kalichman, is called on to handle certain witnesses. There is a certain logic to Mr. Mitchell managing this task with Mr. Hoult and to Catherine McKenzie assisting him in it. Mr. Mitchell was part of a similar presentation by this witness before Justice Jean-Jude Chabot during the industry's constitutional challenge to the Tobacco Products Control Act in 1989, and both were involved in the trial of the Tobacco Act in the following decade.
On that occasion, RJR-Macdonald's lawyers used Mr. Hoult's testimony to rebut the expert views of Richard Pollay. It soon became clear that the same goal was in Mr. Mitchell's mind today.
"If you listen to Richard Pollay, you will think that tobacco company does marketing different than other companies," Mr. Mitchell gave as a reason for Mr. Hoult's long explanations about market research at Unilever and Schlackman International, where he once worked.
"If you go through Richard Pollay's report, only 'big bad tobacco companies' engage in that marketing," he said to justify asking Mr. Hoult his views on the marketing practices of government tobacco monopolies in France and Spain.
A somewhat shortened leash and a disgruntled judge.
The problem for Mr. Mitchell was that today Justice Riordan seemed disinclined to allow this fact witness to play the role of an expert. Quite firmly, the judge reminded him that the industry's own marketing experts would be available to respond to Mr. Pollay, but that Mr. Hoult had not been qualified to do so.
The lawyer might be forgiven for having prepared his questions thinking that he would get away with stretching the boundary as others have been permitted to. (Jeffrey Gentry and Graham Read are two prominent examples of Justice Riordan's latitude in allowing de-facto expert testimony from fact witnesses).
Although he ultimately allowed most questions to flow, Justice Riordan made it clear that he thought Doug Mitchell should do a better job of toeing the line. "You are way into an expert's realm... the objection [of plaintiff lawyer Philippe Trudel] is not without great merit."
As Doug Mitchell plowed on with his line of questions, the judge's body language echoed his impatience. By turns his chin was propped up on his fist, or his body angled back in his chair. Today is the first day in this trial that my notes show the judge stifling a yawn and looking pointedly at the clock mid-afternoon.
Perhaps repetition is not always the soul of persuasion
Although Peter Hoult was once president of RJR-Macdonald (1987-88), it was his role as head of the marketing department (1979-1983) that were the focus of Mr. Mitchell's questions today. He is thus the third JTI-Macdonald witness to be brought in to comment on the marketing practices in the company.
The first two testified two months ago. Robin Robb was a contemporary of Mr. Hoult's at the company, working in the marketing department from 1978-1984. Mr. Lance Newman started at RJR-Macdonald in 1992 and is still there.
These three men tell remarkably similar stories of arriving at the company with backgrounds in consumer product goods and of using a "market-oriented" or "market-driven" approach to try to save the Export A brand from the marketing mistakes of their predecessors. The presence of all three at this trial seems designed to establish that RJR/JTI-Macdonald marketed its cigarettes no differently than it would have done laundry soap or toothpaste.
Coming at the end of this train, Mr. Hoult seems to have little new to offer. If anything his chorus of I came, I saw, I set about fixing the Export A image only drew attention to the conflicts between the three marketers' views about what were good or bad approaches.
Mr. Newman, for example, testified last November 21st about the "sleepless nights" he experienced trying to overcome the working-class trucker image of the Export A brand. Mr. Robb had similarly testified about trying to wrest the brand from the stodgy "traditional and reliable" image his predecessors had given the brand, and how important it had been to remove the truck from the picture.
The shift happened as part of his own "last chance" efforts to save the Export A brand from the mistakes of his predecessors. Upon arriving at the company in 1979 he set about "to fix the Export A problem" by applying the marketing approaches he had learned at Unilever and William Schlackman Ltd before joining RJ-Reynolds International.
Mr. Hoult responded to research that found the Export 'A' smoker to be a man without ambition ("does not aspire to be anything other than a blue collar worker,") but with a desire to get out from under his boss. ("the one added dimension that would increase his satisfaction would be if a greater dimension of freedom or independence was super-imposed on his work situation.") (Exhibit 40247).
Out went depictions of men smoking in quiet contemplation! In came depictions of men at work in independent settings, like logging or trucking.
His successor may have lost sleep over the result, but Mr. Hoult still considers the results to be successful. At the very least, in his imagery the Export A smoker "certainly doesn’t have a dalmation dog!"
Export A ads before and after Mr. Hoult's influence: 1974 (top), 1979, 1980, 1981 (bottom) - Exhibits 40419, 40420, 40436, 40463
Priority 1: Lowest
In addition to giving life-support to Export A, Mr. Hoult was also tasked in his earlier years with the company with the development of new brand families. Today, he spoke of the work to develop Macdonald Select, which he said was intended to beg the lowest tar offering at the time. (Exhibit 40432).
Unlike Export A and its working-class clientele, this was a brand that would be smoked by "contemporary, highly aware, intelligent, self-assured cosmopolitan" people.
 |
| Exhibit 40480 |
Other package elements, gave the brand "connotations of desirable choice." The crest was identified as a way to symbolize quality and prestige. The cigarettes themselves had designs that were "elaborate and expensive."
Mr. Hoult was asked to rebut Mr. Pollay's testimony that tobacco advertising essentially contained no real information by describing the informational content of the Macdonald Select advertisement. (Exhibit 40480, shown above).
He saw a lot of information contained with in it - and for several minutes was able to hold forth on the ways in which the ad provided information about the qualities of the cigarette, the discriminating taste and aspirations of those who buy it, the reputation of the manufacturer. "I think there is an enormous amount of information in here." Oh, my.
Mr. Hoult's testimony will continue on Tuesday and Wednesday. The trial will not sit on Thursday.
Thursday, 4 October 2012
Day 67: Under foreign influence
On Thursday, Ocober 4th, the class action trial against Canadian companies moved towards Canada's Thanksgiving holiday break with the fourth and last day of testimony by Peter J. Hoult.
Mr. Hoult is a former heavy-weight in the former RJ-Reynolds empire. He is the one-time marketing boss for RJR-Macdonald (1979-1983), president of RJR-Macdonald (1987-88) and executive vice president for RJ-Reynolds USA operations (1988-89).
As he had for the first three days, plaintiff lawyer Mr. Philippe Trudel lead the questioning in a soft-spoken and unruffled manner. An underlying theme to his questions to this witness has been the extent to which major decisions at the company were directed by the company's owners (RJR Tobacco International and the holding company for all the Reynolds companies, RJ Reynolds Industries).
Mr. Hoult's casual acceptance of the role that international tobacco companies played in trying to influence political decisions and social attitudes in Canada seemed a stark contrast to the recent furor about foreign interests influencing the Northern Gateway project!
In the war against Canadian tobacco legislation, who exactly was the Field Marshall?
Mr. Hoult was in the president's office at RJR-Macdonald during the parliamentary review of the 1980s legislative initiatives to curb tobacco promotion, C-204 and C-51. A week after Health Minister Jake Epp introduced Bill C-51 in April 1987, the CTMC was working on plans for the "galvanizing of opposition" (Exhibit 718), plans which developed further over the spring and summer (Exhibit 734, 433D). RJR-Macdonald was very concerned about the impact these laws would have (Exhibit 722).
From the outset, Peter Hoult reported in to his superiors Sam Witt and Richard Marcotullio, and their communications specialist James Fyock, from whom he received "human resources", instructions, advice and technical assistance. The U.S.-based parent company wanted the Canadian campaign to be "more aggressive". (Exhibit 719, 728, 735).
The description offered by Mr. Hoult in his testimony differed from the impression left by the documents. When Philippe Trudel asked "would it be fair to say the campaign against bills C-204 and C-51 was coordinated with RJR Industries," Mr. Hoult replied:
"I think it is better expressed that there was expertise in the US and in RJRTI and in RJRTC that had developed over the years in dealing with the US congress and therefore we were pleased and grateful to make use of the experience that they had had in dealing with a similar situation in Canada. We were really the coordinators and they were providing assistance on an as required basis."
(For more information on the parliamentary review of those laws, see A History of Tobacco Control in Canada, pp. 46-54).
Parliamentary privilege
An important snippet of Canadian tobacco history was finally introduced into evidence today. From the beginning of the trial, the question has hung in the air regarding whether the plaintiffs would be able to put on the record comments made by the industry to parliamentary committees. Today Justice Riordan allowed Peter Hoult's Testimony to the legislative committee reviewing C-204 and C-51 to be admitted as evidence (Exhibit 729).
It was a struggle to get there. On June 11, the industry had argued that parliamentary privilege should disqualify many categories of documents from admission to the trial record. Justice Riordan had signalled that he would be taking "a document by document process" and today was the first day that this approach was tested.
Lawyers from each of the companies jumped to their feet as soon as Philippe Trudel moved to introduce the Hansard record of Peter Hoult's comments to the committee. Justice Riordan gave little air time to any objections. "For every complaint I get on parliamentary privilege, I will allow the document or the testimony to be made and I will decide on whether parliamentary privilege applies on the use," he said.
JTI-Macdonald lawyer Doug Mitchell wanted the plaintiffs to be required to identify the purpose of the document or testimony, and his colleague Francois Grondin protested that allowing the documents in this way was "making a mockery of parliamentary privilege." Simon Potter clarified that "no one on this [the defendants] side of the room has any doubt" that the documents would be used to "impugne the defendants."
Mr. Hoult is a former heavy-weight in the former RJ-Reynolds empire. He is the one-time marketing boss for RJR-Macdonald (1979-1983), president of RJR-Macdonald (1987-88) and executive vice president for RJ-Reynolds USA operations (1988-89).
As he had for the first three days, plaintiff lawyer Mr. Philippe Trudel lead the questioning in a soft-spoken and unruffled manner. An underlying theme to his questions to this witness has been the extent to which major decisions at the company were directed by the company's owners (RJR Tobacco International and the holding company for all the Reynolds companies, RJ Reynolds Industries).
Mr. Hoult's casual acceptance of the role that international tobacco companies played in trying to influence political decisions and social attitudes in Canada seemed a stark contrast to the recent furor about foreign interests influencing the Northern Gateway project!
In the war against Canadian tobacco legislation, who exactly was the Field Marshall?
Mr. Hoult was in the president's office at RJR-Macdonald during the parliamentary review of the 1980s legislative initiatives to curb tobacco promotion, C-204 and C-51. A week after Health Minister Jake Epp introduced Bill C-51 in April 1987, the CTMC was working on plans for the "galvanizing of opposition" (Exhibit 718), plans which developed further over the spring and summer (Exhibit 734, 433D). RJR-Macdonald was very concerned about the impact these laws would have (Exhibit 722).
From the outset, Peter Hoult reported in to his superiors Sam Witt and Richard Marcotullio, and their communications specialist James Fyock, from whom he received "human resources", instructions, advice and technical assistance. The U.S.-based parent company wanted the Canadian campaign to be "more aggressive". (Exhibit 719, 728, 735).
The description offered by Mr. Hoult in his testimony differed from the impression left by the documents. When Philippe Trudel asked "would it be fair to say the campaign against bills C-204 and C-51 was coordinated with RJR Industries," Mr. Hoult replied:
"I think it is better expressed that there was expertise in the US and in RJRTI and in RJRTC that had developed over the years in dealing with the US congress and therefore we were pleased and grateful to make use of the experience that they had had in dealing with a similar situation in Canada. We were really the coordinators and they were providing assistance on an as required basis."
(For more information on the parliamentary review of those laws, see A History of Tobacco Control in Canada, pp. 46-54).
Parliamentary privilege
An important snippet of Canadian tobacco history was finally introduced into evidence today. From the beginning of the trial, the question has hung in the air regarding whether the plaintiffs would be able to put on the record comments made by the industry to parliamentary committees. Today Justice Riordan allowed Peter Hoult's Testimony to the legislative committee reviewing C-204 and C-51 to be admitted as evidence (Exhibit 729).
It was a struggle to get there. On June 11, the industry had argued that parliamentary privilege should disqualify many categories of documents from admission to the trial record. Justice Riordan had signalled that he would be taking "a document by document process" and today was the first day that this approach was tested.
Lawyers from each of the companies jumped to their feet as soon as Philippe Trudel moved to introduce the Hansard record of Peter Hoult's comments to the committee. Justice Riordan gave little air time to any objections. "For every complaint I get on parliamentary privilege, I will allow the document or the testimony to be made and I will decide on whether parliamentary privilege applies on the use," he said.
JTI-Macdonald lawyer Doug Mitchell wanted the plaintiffs to be required to identify the purpose of the document or testimony, and his colleague Francois Grondin protested that allowing the documents in this way was "making a mockery of parliamentary privilege." Simon Potter clarified that "no one on this [the defendants] side of the room has any doubt" that the documents would be used to "impugne the defendants."
Justice Riordan was in no mood to hear any more. "The answer is no. I have given you my position. I will allow the proof to go in, but I will be very cautious as to how it is used. I will be attentive as to whether there has been repetition outside of parliament. That’s it. That’s all. -- Next question!"
A sampling from Peter Hoult's testimony in 1988:
Q. Are there any smokers who die from tobacco-related diseases'. Is the number above zero?
Peter Hoult: "On the basis of the evidence that has been put forward today and on previous occasions. the studies that have been referred to as statistical are just that. All the research that has been carried out clinically has not in one single instance demonstrated that smoke and tobacco causes any disease. That is a clinical result."
Cross border advertising strategies
Other ways in which RJR-Macdonald received a helping hand from its U.S. sister company were identified by Philippe Trudel. The company planned on "overflow advertising" from American magazines to promote the Camel Brand (Exhibit 720) . An arrangement was made for the costs of Winston promotions to be picked up by the parent company, giving the Canadian company more wiggle room in its advertising budget which was constrained by a cost-ceiling under the industries' voluntary code. (Exhibit 721).
Mr. Hoult had once described the Barclay filter as a technique of "cheating" smoking machines. Philippe Trudel now asked him whether this was a "kind of Barclay strategy," to cheat the CTMC budget ceilings. "Absolutely not!" said Mr. Hoult, in an answer that suggested that he saw the marketing of the Winston brand as an exogenous event to RJR-Macdonald, even though it was his company that distributed the brand.
Hoult on cigarette taxes - they reduce consumption
In 1987, Peter Hoult helped prepare a CTMC position on taxation, aimed at "limiting tobacco tax increases" and keeping "taxation and smoking and health issues split". (Exhibit 724 and 724A). But in answering questions 25 years later, Mr. Hoult suggested that cigarette taxes were linked with health outcomes. "Taxation was absolutely clear cut," he explained. "It increased the price of cigarettes. Increasing the price of cigarettes impacted the total volume of the industry." This is different than the position taken by JTI-Macdonald's current president, Michel Poirier, on September 19th.
The final questions
Shortly after lunch, Mr. Trudel asked his last questions, and the opportunity for other parties' to question the witness became available. (Confusingly, this is not technically a cross-examination, although it would pass for it on television).
The federal government lawyer, Maurice Regnier, was first to the post. The federal government is trying to get out of this case (a Court of Appeal decision is pending) and Mr. Regnier has consistently kept a low profile in the court. He typically intervenes only on questions where there has been a focus on the role of the federal government, of which there were many instances in Mr. Hoult's testimony.
Mr. Regnier countered the suggestion that the government approved the industry's agreement over how consistent the levels published on the side of the pack had to be with machine tests, asking questions that left the impression that this agreement was never even known to government.
On the issue of government approval of the Hunter List of additives, Mr. Regnier pushed Mr. Hoult to identify the source of his knowledge or impression about Health Canada's position. His answer, as I heard it, is one for the keeper list. "The Hunter List and the German List were accepted by many governments and therefore Canada being part of the many governments would accept the list ... I have no indication they rejected the list, and in that we operated within it, there was an assumption they agreed."
To counter this impression, Mr. Regnier introduced as evidence a Health Canada record of a meeting with the tobacco companies during which the use of additives had been discussed (Exhibit 50018R - not yet available). "Dr. Bray expressed concern about the toxicity of additives and asked if there was any information available from parent or associated companies on toxicity of additives." and "The manufacturers asked if the Hunter list or any other list could be used as a Canadian guideline for approved or non-approved additives. Dr. Bray replied that this was not the case." (More documents related to additives were put on the trial record - Exhibits 717, 717A).
Mr. Regnier also challenged Mr. Hoult's assertion that the government would not have allowed the printing of additional health information on or leaflets inserted in cigarette packages. The witness was shown a memo sent to the CTMC well before Mr. Hoult's arrival in Canada that urged the companies to use package inserts or other means to "inform consumers about the least hazardous use of the product." (Exhibit 50014).
We didn't advertise cigarettes to kids - we advertised cigars to kids.
 |
| Junior Hockey - 1983 |
On behalf of JTI-Macdonald, Doug Mitchell introduced documents which supported the position of Mr. Hoult that the Creative Research Group had been asked to limit its research on young people to those over 18 and that the researchers had confirmed receiving this request (Exhibit 40018, 40019, not yet available).
And as for the printing of advertisements in the magazine Junior Hockey in 1982 -- well, Doug Mitchell pointed out those were for little cigars, and reminded the court that the Judge had previously ruled that the evidence was restricted to cigarettes. (The cigar brand was O'sherry - a brand no longer sold).
Justice Riordan: the reluctant hall monitor
On Wednesday, Mr. Hoult had introduced a the term "swingeing" to describe punishing and restrictive regulations. But it was lawyers' prolonged "whinging" on Thursday that Justice Riordan may have found punishing to listen to.
On September 17th, he had ruled that the plaintiffs had the right to subpoena CTMC documents that are now held in British Columbia and Ontario, and his ruling had pushed for quick actions on the part of the tobacco companies. The plaintiffs had wanted to take the opportunity of next week's break to go to Vancouver and review the documents, and complained at industry delays in setting this up. Suzanne Coté's gave as a reason for needing more time the fact that their client was "out of the country." Working for a multinational may have its advantages.
Justice Riordan said he had "a lot of trouble understanding the companies' positions" but implied concerns about preventing the companies from ragging the puck while the decision was being appealed. He pushed for a report next Wednesday, when the trial will reconvene for a half day.
Very soon the trial will turn to witnesses from Philip Morris International's Canadian operation, Rothmans, Benson & Hedges (RBH), which is represented in this trial by Mr. Simon Potter. His concerns about the rescheduling of the current president of the company, Mr. Barnett were expressed at length - why use one adjective when two or three more are available for use? Again, Justice Riordan declined the invitation to meddle in issues that he thought the lawyers should work out independently.
Let us give thanks for a break week
This past three week leg of the trial has been the least fractious to date. From the body language and occasional laughter in the court, this month has been less wearing on the lawyers than previous ones.
Now it seems Justice Riordan who is more worn down from the work. He has become quicker and blunter in his admonishments to the lawyers ("this type of question is really tedious" - "that's it, that's all" ). The plaintiffs made visible efforts today to adjust their plans to his more forcefully expressed concerns.
Next week the court meetings on Wednesday morning (October 10), when the first witness from Rothmans, Benson & Hedges will testify. His name is Ron Bulmer.
Day 66: Avoiding 'swingeing' regulations
On Wednesday October 3rd, Mr. Peter J. Hoult, a former marketing head and president of RJR-Maconald and marketing vice-president of RJ-Reynolds, testified for a third day at the trial of the Quebec class action suits against tobacco companies.
On his first day at the trial last week, Mr. Hoult gave expansive answers to general questions put to him by plaintiff lawyer, Philippe Trudel. On his second appearance this Monday, he was shown documents connected to his time at the company (1979 to 1983 and 1987-88) and asked to elaborate. Today, the questions were more tightly focused on specific events and decisions taken during his time at the company. Thursday is his last day of scheduled testimony.
For three days Mr. Hoult has maintained an unabashed air of comfort about the business of selling cigarettes. This is a man who expresses no regrets, and often speaks enthusiastically about managing the marketing efforts within a global tobacco company.
Last Friday, for example, in response to questions about research on smoker compensation (by which smokers think they are inhaling a lower amount of tar than they actually are), he replied that such research would naturally be of interest because "if there is something found on the positive side you can benefit from, as a marketer you will certainly take advantage."
Out Barclaying Barclay
Today, Philippe Trudel returned to how a marketer might take advantage of smoker compensation. He chose as a starting point the 1980 launch of the Barclay brand in the United States. The filter used on this cigarette predictably resulted in smokers receiving significantly more nicotine and tar than the values shown on the package.
Mr. Hoult sounded the alarm about the Barclay brand shortly after it appeared in test markets. In January of 1980, he wrote his boss a worried-sounding memo describing the brand's market appeal, and the impact it might have on the market and on regulators.
“One of the major consumer benefits is the brand's flavour level which is significantly higher than could normally be expected from its official tar and nicotine rating. This benefit however is achieved quite simply because the filer structure cheats the machine." (Emphasis in original. Exhibit 701)
If RJR-Macdonald could not get an industry agreement to not market such brands in Canada, then his company should prepare to market its own version. (Exhibit 703).
During his testimony today, Peter Hoult did not offer much of an explanation of how it was that the Barclay cigarette was able to cheat the machine, and it seemed from the back of the room that Justice Riordan did not entirely understand that one way of "taking advantage" of smoker compensation was to manufacture cigarettes with compensatible filters, let alone that the companies may have learned from the Barclay experience to accomplish this in more surreptitious ways.
Philippe Trudel tried to provide information on the Barclay filter by introducing into the trial record an article from the New Scientist, but was blocked by an objection from the lawyer for BAT's Canadian subsidiary, Deborah Glendinning, who convinced the judge that since the Barclay brand of cigarettes was never sold in Canada it was irrelevant. (The story been well explained elsewhere.)
Despite his vague answers about compensation earlier this week, Mr. Trudel introduced documents that showed that Peter Hoult had an early enthusiasm for researching compensation (Exhibit 695), and that he visualized an approach to manufacturing more compensatible cigarettes (Exhibit 701, 703). After launching a new low-tar brand in Canada, his senior management praised him for having "out Barclayed Barclay!" (Exhibit 702)
Why not give smokers more information?
In 1987, shortly after returning to Canada as president of RJR-Macdonald, Mr. Hoult wrote to the president of the Canadian Cancer Society and informed her that, even at that late date, "the tobacco manufacturers do not believe that the alleged dangers to health have been scientifically proven." They did however feel that smokers should be "made aware of such allegations." (Exhibit 691). The company's limited support for making making smokers aware of health risks the subject of several exchanges between lawyer and witness.
Mr. Trudel pointed to the company's intention to "strenuously resist with all means at their disposal" additional health warnings, and the record of their resistance while the first federal regulations were being developed. (Exhibit 693, 694). Why, he asked, would they resist more warnings?
Mr. Hoult rattled off four reasons: "We felt the warnings were redundant in the sense that a huge majority of the Canadian population truly believed that smoking caused various diseases, including cancer. With that total belief any further warnings would be redundant. The pack represented the brand - the health warnings obviously disturbed what was our brand in the market place. It was obviously a matter of some expense to put warnings on the pack. These were warnings that the government took responsibility for and which we carried on our pack."
His company was also concerned about smokers' receiving health information from other sources. When the Canadian Pharmaceutical Association launched a public information campaign on the risks of smoking while taking the birth control pill, RJR-Macdonald received assistance from its head office on how to discredit those concerns. (Exhibit 692, 692A, 692B).
Curiously, despite his view that the risks of smoking are well known, Mr. Hoult could not say what risks were elevated by smoking while on the pill. Nor was he able to say how many deaths were attributable to smoking.
"Did you ever have this information?" Mr. Trudel asked.
"When I was working in Canada, I am sure that there was commentary in the press and estimates by various government bodies, but I don’t have a recollection of the number."
"Was it more than 10,000?"
"I have no recollection."
"More than 100?"
"I have no idea – I really can't answer the question"
Unreliable labelling
To date, public health concerns about putting labels on cigarette packages that give levels of tar, nicotine and other smoke constituents were based on the fact that these levels were not a reliable indicator of what a smoker will actually inhale under real-life conditions. (Numeric indicators are now removed from Canadian cigarettes). Thanks to the evidence presented by Mr. Trudel and Mr. Hoult, we now know that tobacco companies deliberately manufactured their products so that the labels were not a reliable indicator of what a smoking machine would receiver.
Mr. Hoult testified today that there was an agreement amongst tobacco companies to allow a "tolerance" on smoking machine level readings. In 1979, companies that designed and manufactured cigarettes to give 10 mg of tar to a smoking machine could label them as giving 9 mg of tar. It is not clear from the exhibits filed whether the government was also included in this agreement, although Mr. Hoult suggested they were.
Philippe Trudel asked if the company deliberately manufactured at the upper end of the tolerance. Yes, explained Mr. Hoult, especially "with regard to lower tar, where smokers were clearly wanting a lower number." His memo to staff in 1980 instructed that the company would "remain within the legal limits albeit at the boundary of the limits for certain brands." (Exhibit 700)
It would appear that the policing of these levels was done by the companies themselves. (Exhibit 696, 697, 698, 698A 699 . RJR was a little shy to blow the whistle on its competitors, because "if one company queries another, then it just opens the door for that other company to come back at us with their queries” (Exhibit 697). In 1982, the CTMC discussed reducing the tolerance by one-half. (Exhibit 714B)
CO demands - lost in translation
In June 1980, the federal Health Minister, Monique Bégin wrote the presidents of the CTMC, Paul Paré, and requested that the companies work to reduce the levels of carbon monoxide in their cigarettes.The original letter was written in French (both Mme Bégin and Mr. Paré were Francophone Quebecers), but it was translated into English before being circulated by Peter Hoult to his senior marketing and sales staff. "Under no circumstances," he warned them "must any of our brands be at the top of a published table." (Exhibit 713, 713A)
Mr. Trudel asked Mr. Hoult how he reacted to the letter when he received it. "Clearly this was another warning shot. It was only a question of time before numbers would be required for carbon monoxide as they were for tar and nicotine. We had to get ourselves in a ready state, and prepare for another component to clutter our pack."
Clutter in the sense of too much information? asked Mr. Trudel
Clutter in the sense that it would be another element damaging or affecting the integrity of the pack. ... This was information the consumer did not need because he or she had made up their minds already."
On his first day at the trial last week, Mr. Hoult gave expansive answers to general questions put to him by plaintiff lawyer, Philippe Trudel. On his second appearance this Monday, he was shown documents connected to his time at the company (1979 to 1983 and 1987-88) and asked to elaborate. Today, the questions were more tightly focused on specific events and decisions taken during his time at the company. Thursday is his last day of scheduled testimony.
For three days Mr. Hoult has maintained an unabashed air of comfort about the business of selling cigarettes. This is a man who expresses no regrets, and often speaks enthusiastically about managing the marketing efforts within a global tobacco company.
Last Friday, for example, in response to questions about research on smoker compensation (by which smokers think they are inhaling a lower amount of tar than they actually are), he replied that such research would naturally be of interest because "if there is something found on the positive side you can benefit from, as a marketer you will certainly take advantage."
Out Barclaying Barclay
Today, Philippe Trudel returned to how a marketer might take advantage of smoker compensation. He chose as a starting point the 1980 launch of the Barclay brand in the United States. The filter used on this cigarette predictably resulted in smokers receiving significantly more nicotine and tar than the values shown on the package.
Mr. Hoult sounded the alarm about the Barclay brand shortly after it appeared in test markets. In January of 1980, he wrote his boss a worried-sounding memo describing the brand's market appeal, and the impact it might have on the market and on regulators.
 |
| The Barclay cigarette's compensatible filter |
“One of the major consumer benefits is the brand's flavour level which is significantly higher than could normally be expected from its official tar and nicotine rating. This benefit however is achieved quite simply because the filer structure cheats the machine." (Emphasis in original. Exhibit 701)
If RJR-Macdonald could not get an industry agreement to not market such brands in Canada, then his company should prepare to market its own version. (Exhibit 703).
During his testimony today, Peter Hoult did not offer much of an explanation of how it was that the Barclay cigarette was able to cheat the machine, and it seemed from the back of the room that Justice Riordan did not entirely understand that one way of "taking advantage" of smoker compensation was to manufacture cigarettes with compensatible filters, let alone that the companies may have learned from the Barclay experience to accomplish this in more surreptitious ways.
Philippe Trudel tried to provide information on the Barclay filter by introducing into the trial record an article from the New Scientist, but was blocked by an objection from the lawyer for BAT's Canadian subsidiary, Deborah Glendinning, who convinced the judge that since the Barclay brand of cigarettes was never sold in Canada it was irrelevant. (The story been well explained elsewhere.)
Despite his vague answers about compensation earlier this week, Mr. Trudel introduced documents that showed that Peter Hoult had an early enthusiasm for researching compensation (Exhibit 695), and that he visualized an approach to manufacturing more compensatible cigarettes (Exhibit 701, 703). After launching a new low-tar brand in Canada, his senior management praised him for having "out Barclayed Barclay!" (Exhibit 702)
Why not give smokers more information?
In 1987, shortly after returning to Canada as president of RJR-Macdonald, Mr. Hoult wrote to the president of the Canadian Cancer Society and informed her that, even at that late date, "the tobacco manufacturers do not believe that the alleged dangers to health have been scientifically proven." They did however feel that smokers should be "made aware of such allegations." (Exhibit 691). The company's limited support for making making smokers aware of health risks the subject of several exchanges between lawyer and witness.
Mr. Trudel pointed to the company's intention to "strenuously resist with all means at their disposal" additional health warnings, and the record of their resistance while the first federal regulations were being developed. (Exhibit 693, 694). Why, he asked, would they resist more warnings?
Mr. Hoult rattled off four reasons: "We felt the warnings were redundant in the sense that a huge majority of the Canadian population truly believed that smoking caused various diseases, including cancer. With that total belief any further warnings would be redundant. The pack represented the brand - the health warnings obviously disturbed what was our brand in the market place. It was obviously a matter of some expense to put warnings on the pack. These were warnings that the government took responsibility for and which we carried on our pack."
His company was also concerned about smokers' receiving health information from other sources. When the Canadian Pharmaceutical Association launched a public information campaign on the risks of smoking while taking the birth control pill, RJR-Macdonald received assistance from its head office on how to discredit those concerns. (Exhibit 692, 692A, 692B).
Curiously, despite his view that the risks of smoking are well known, Mr. Hoult could not say what risks were elevated by smoking while on the pill. Nor was he able to say how many deaths were attributable to smoking.
"Did you ever have this information?" Mr. Trudel asked.
"When I was working in Canada, I am sure that there was commentary in the press and estimates by various government bodies, but I don’t have a recollection of the number."
"Was it more than 10,000?"
"I have no recollection."
"More than 100?"
"I have no idea – I really can't answer the question"
To date, public health concerns about putting labels on cigarette packages that give levels of tar, nicotine and other smoke constituents were based on the fact that these levels were not a reliable indicator of what a smoker will actually inhale under real-life conditions. (Numeric indicators are now removed from Canadian cigarettes). Thanks to the evidence presented by Mr. Trudel and Mr. Hoult, we now know that tobacco companies deliberately manufactured their products so that the labels were not a reliable indicator of what a smoking machine would receiver.
Mr. Hoult testified today that there was an agreement amongst tobacco companies to allow a "tolerance" on smoking machine level readings. In 1979, companies that designed and manufactured cigarettes to give 10 mg of tar to a smoking machine could label them as giving 9 mg of tar. It is not clear from the exhibits filed whether the government was also included in this agreement, although Mr. Hoult suggested they were.
Philippe Trudel asked if the company deliberately manufactured at the upper end of the tolerance. Yes, explained Mr. Hoult, especially "with regard to lower tar, where smokers were clearly wanting a lower number." His memo to staff in 1980 instructed that the company would "remain within the legal limits albeit at the boundary of the limits for certain brands." (Exhibit 700)
It would appear that the policing of these levels was done by the companies themselves. (Exhibit 696, 697, 698, 698A 699 . RJR was a little shy to blow the whistle on its competitors, because "if one company queries another, then it just opens the door for that other company to come back at us with their queries” (Exhibit 697). In 1982, the CTMC discussed reducing the tolerance by one-half. (Exhibit 714B)
In June 1980, the federal Health Minister, Monique Bégin wrote the presidents of the CTMC, Paul Paré, and requested that the companies work to reduce the levels of carbon monoxide in their cigarettes.The original letter was written in French (both Mme Bégin and Mr. Paré were Francophone Quebecers), but it was translated into English before being circulated by Peter Hoult to his senior marketing and sales staff. "Under no circumstances," he warned them "must any of our brands be at the top of a published table." (Exhibit 713, 713A)
Mr. Trudel asked Mr. Hoult how he reacted to the letter when he received it. "Clearly this was another warning shot. It was only a question of time before numbers would be required for carbon monoxide as they were for tar and nicotine. We had to get ourselves in a ready state, and prepare for another component to clutter our pack."
Clutter in the sense of too much information? asked Mr. Trudel
Clutter in the sense that it would be another element damaging or affecting the integrity of the pack. ... This was information the consumer did not need because he or she had made up their minds already."
When the request from the Minister was discussed at length at the CTMC, (714, 714A, 714B, 714C, 715, 715A), the industry hoped that their own translation might be more demanding than the English version that had originally been written by departmental staff. (The twice-translated request for voluntary printing of CO levels on packages was not agreed to.)
Today Mr. Hoult said that the health risks from carbon monoxide were "extremely serious", but at the time he was vice-president of marketing, RJR wanted the industry to "challenge the validity" of the government's health concerns. If necessary, it wanted to prepare an industry position to "show that the carbon monoxide question is still open to debate." (Exhibit 716, 716A).
The neighbourhood tobacco presence.
Although Monique Bégin was not successful in getting the industry to voluntarily place carbon monixide values on their cigarette packaging, she continued to make requests of the companies. In 1982 she asked them to tighten their voluntary code provisions related to advertising around schools, health warnings on advertising and constituent labelling on advertising. (Exhibit 707)
Her request and information material provided to RJR sales staff (Exhibit 710, 711) were the basis of questions to Mr. Hoult about its retail and street level marketing activities. Was one of the reasons that the company was more agreeable to the request to put health warnings on billboards that "the consumer cannot notice them," Mr. Trudel asked. In a long answer, Mr. Hoult said words to the effect of yes - "there would be no negatives because the overall impression [is the only takeaway], rather than the reading of copy."
As to why the company had a "negative attitude" towards expanding the ad-free zone around schools, Mr. Hoult said it was a "rather more swingeing" measure.
"Swingeing?" Justice Riordan asked for a definition. (I think on behalf of everyone else in the room). In his still-very-English accent, Peter Hoult looked surprised that this term to describe excessive measures was unfamiliar. "It usually refers to tax increases," he explained.
The company's practices with respect to giving away free cigarettes (Exhibit 710) and putting counter-top cigarette displays in the face of convenience store customers (Exhibit 711) were not a threat to youth, Mr. Hoult explained. "I can't say it is impossible. I think it is highly unlikely" that sales staff hired to give away free cigarettes in stores would provide them to underage youth, he said. There was no need to take tobacco promotions out of stores that were located near schools both because the Minister of Health did not require them to be removed and because it didn't make any difference 'if people were already going into the store to buy cigarettes."
Tomorrow is expected to be Mr. Hoult's last day of testimony. Next week, the trial will be on recess except for Wednesday morning, when the first witness from Rothmans, Benson & Hedges (Mr. Ron Bulmer) will testify.
Monday, 1 October 2012
Day 64: Marketing and Controversy
See note at the end of this post for information on accessing documents
It was a very full day in the 17th floor courtroom at Montreal's Palais de Justice. The witness was Peter J. Hoult, who is both a former president of RJR-Macdonald (now JTI-Macdonald) and a former senior marketing executive with other branches of the now-reformulated Reynolds tobacco empire. His testimony was a whirl-wind tour of major themes in tobacco marketing.
But before we get there -- a word on other current events
Another victory for the plaintiffs at the Court of Appeal.
Last spring, the defendants in the class actions asked the Appeal Court for leave to appeal the mid-March decision of Justice Riordan to allow questions on contraband. Justice Hilton decided last May that a full panel of the court should consider in one sitting the question of whether an appeal should be permitted and, if so, how it should be decided.
And so it was that Suzanne Coté (BAT/Imperial Tobacco Canada), Guy Pratte (JTI-Macdonald), Simon Potter (PMI/Rothmans, Benson & Hedges) presented their arguments for an appeal to Justices Jacques Dufresne, Francois Pelletier and Louis Rochette. Arguing against the suggestion on behalf of the CQCT/Blais and Létourneau classes was Marc Beauchemin. (Many other counsel involved in the case were present in the ornate art-deco court room).
With a time limit on pleadings, by 11:25 a.m. it was all over but the deciding. The justices left the room for no more than 5 minutes, and then returned to announce their agreement that there was no basis for appeal. Marc Beauchemin, whose specialty in this class action lawsuit is covering the Appeal Court went home with yet another win for his side. Justice Riordan may also have felt a little celebratory at the court again upholding his management of this case.
There may be ripples to this decision. Last week, Justice Riordan had postponed deciding whether to reconsider another issue related to scope of questions "at least until after the Court of Appeal has taken a position on the question of the contraband, smuggling."
More Statements of Claim!
This summer a number of provinces filed claims against tobacco companies, and English versions of two of the claims have recently become available. The Quebec government claim, prepared by the province's justice department, is a very detailed (and readable) analysis of tobacco industry actions. The claim for the province of Prince Edward Island is the most recent claim prepared by the legal team that is supporting several provincial actions.
Peter Hoult's second day
Mr. Trudel picked up his questioning of Mr. Hoult and the day proceeded much as it had last week, with the witness speaking readily and at some length.
Much of last Thursday had been spent on general or background questions. Today, Philippe Trudel based almost all his questions on specific documents. They addressed four main themes: marketing to youth, RJR-Macdonald's lack of autonomy from its foreign owners, the marketing of low-tar Vantage cigarettes to discourage quitting, and the use of additives in Canadian cigarettes.
The more cordial and relaxed atmosphere that has taken over the court with the change to JTI-Macdonald witnesses wobbled a little this morning, as Doug Mitchell tried to defend his clients more energetically than he had done last week. For the first part of the morning, he stood frequently with new objections to the introduction of exhibits. Despite their creativity, these concerns seemed no more successful than previous attempts and by the afternoon he had reverted to a more subdued defence.
For example, the first document shown to Mr. Hoult was a 1982 memo showing the company directing the placement of ads for Export A cigarettes in the Junior Hockey magazine, (Exhibit 659). Mr. Mitchell tried to block the document, saying that it had "no evidentiary value."
Justice Riordan gave him a sideways look and asked wryly "is this an objection based on usefulness?" Mr. Mitchel explained that "the prejudicial effect of the document is greater than its probative value."
This novel suggestion did not win the day and a few minutes later Mr. Trudel was able to ask Mr. Hoult if he knew at what age junior hockey is played. Mr. Hoult replied "I don't know the answer to that. I don't know anything about hockey".
It was left unclear whether the prejudicial effect Mr. Mitchell was concerned about was the fact that a game for 16 and 17 year-olds was used as a vehicle for cigarette ads, or that a multinational company would put a man who knew nothing about hockey in charge of a Canadian marketing effort.
The man behind Joe Camel?
Mr. Trudel's next questions centred on Mr. Hoult's involvement with the international marketing of the Camel brand, and his involvement in the re-focusing of that brand's marketing to the youngest end of the market.
It was in his position of International Marketing Vice President for RJR international that he had chaired a strategy session for the Camel brand in 1983. (He worked at RJR-Macdonald from the end of 1979 to 1983 and then again from 1987 to 1988).
The review identified "Young Adult Opportunities" and noted "the key importance of young adults not only to the immediate development and growth of a brand, but also to its long term position in the market." (Exhibit 661). This approach was supported by a detailed strategy plan, originating in RJR's operations in the United States. (Exhibit 660-A).
Mr. Hoult never testified that this strategy resulted in the cartoon Joe Camel campaign, which he oversaw after moving to RJR's American operations after a year as president of RJR-Macdonald in 1987-88. The memory spoke for itself.
The candid campaign
Joe Camel was not the only controversial campaign that Peter Hoult was associated with. He was also a central figure in the Canadian roll-out of the "candid campaign" for Vantage cigarettes. This campaign he explained as an attempt to "offer the smoker a way out of his dilemma when he wanted to smoke lower tar and nicotine cigarettes but his experience was that these cigarettes were unsatisfying."
The vantage cigarette was designed to address the dissatisfaction of smokers with low-tar brands, he explained, and for a few years had a "distinguishing filter" with a hole running down the centre.
Mr. Trudel pushed him to clarify whether the smokers dilemma was not also whether or not to smoke. Only when shown a Vantage ad that made this hard to deny did Mr. Hoult acknowledge "I think in this case, yes."
The market research conducted for the Vantage brand shows the care with which the company tested health impressions of the brand (Exhibit 662 665), and modified it for a changing market (Exhbit 663 663A 664 ). Vantage was given a heavy marketing push (Exhibit 667) and was eventually supported through a more traditional lifestyle campaign (Exhibit 672).
Mr. Trudel introduced documents which showed that the marketing of Vantage in Canada was aligned with the desires of US-based owners. It also shows that the company decided to proceed with its "candid" campaign despite knowledge that this triggered public concerns. (Exhibit 666, 671).
See more samples of Vantage ads in exhibits 572, 572A, 572B, 572C, 572D, 572E, 572F, 572G)
Losing the tempo
Another controversial campaign conducted by RJR-Macdonald concerned Tempo cigarettes. Under development for some years as the "third family" for RJR-Macdonald, Mr. Hoult revealed there were high hopes the brand would fill a market void that its Export and Vantage families didn't. (The Canadian plant was again working closely with head office -Exhibit 668).
The seemingly youth-friendly Tempo cigarettes were test marketed in Ottawa, but were never sold in Quebec. Mr. Mitchell (unsuccessfully) objected to images from Tempo's campaign being introduced to the trial, as there was no evidence that the imagery had ever been used. (While he made this argument, I was able to watch a muted version of an archived CBC news story showing billboards and bus shelter ads with the same imagery.)
Putting the nicotine back in G-13
Last Thursday, Mr. Hoult had testified that RJR applied nicotine when manufacturing reconstituted tobacco.
"It was called a G-13 process, so I won't get into detail, except to say it expanded the tobacco like puffed wheat.... In part of this process the nicotine was extracted and it was therefore out of balance; therefore, the nicotine was put back."
Today the trial was told that this nicotine-adjusted G-13 tobacco was present in virtually all of the cigarettes made by RJR-Macdonald, and that it made up more than one-third of the tobacco in one brand (Macdonald Select Ultra Mild) (Exhibit 673, 673A).
Additives - natural and unnatural.
This trial continues to gather evidence of the intrigue that surrounded that the use of additives in Canadian cigarettes.
Today we learned that RJR's senior scientist, Derick Crawford, did not agree with the collective decision of "the CTMC presidents" that all flavours were on the Hunter of German Lists (of approved cigarette additives), and that RJR-Macdonald had a "specific request" from its USA 'sister company' to maintain the regulatory status quo in Canada. Mr. Crawford was concerned that three of the additives used by the company were on neither the Hunter nor German lists. Two of them were listed on the FEMA/GRAS list used by the American companies and one was a newly introduced "natural tobacco extract" with the "least concern from a toxicological point of view." (Exhibit 674)
The company's dilemma could be addressed if "natural tobacco extracts" were included on either the Hunter or German lists of permitted compounds. Sure enough, a couple of weeks later, Mr. Crawford is discussing the issue with the CTMC technical committee. Hearing that "'nature identified substances" were accepted on the German list, he takes comfort that "this would then clear our 'natural tobacco extract' used on Macdonald Select." (Exhibit 612-D)
The trial had already seen that Macdonald Select had high use of "nicotine-adjusted" G-13 reconstituted tobacco, and also that it was made with "natural tobacco extract." Mr. Trudel put two and two together and raised the issue of whether nicotine was the natural tobacco extract that had recently been put into use at RJR-Macdonald.
Mr. Hoult acknowledged that nicotine was a natural extract, but did not volunteer that it was the additive referred to in 1982.
He was then reminded of a memo sent to him in 1987 when RJR-Macdonald was facing the likelihood of having to disclose its additives to government. "We may have a unique additive which enables us to achieve product superiority to competition through the use of DM, and as such would not want to divulge it," Mr. Crawford had written him. (Exhibit 636)
The suggestion that DM was a form of nicotine was in the air when Mr. Trudel asked Mr. Hoult "What is DM?"
"I don't know"
But before we get there -- a word on other current events
Another victory for the plaintiffs at the Court of Appeal.
Last spring, the defendants in the class actions asked the Appeal Court for leave to appeal the mid-March decision of Justice Riordan to allow questions on contraband. Justice Hilton decided last May that a full panel of the court should consider in one sitting the question of whether an appeal should be permitted and, if so, how it should be decided.
And so it was that Suzanne Coté (BAT/Imperial Tobacco Canada), Guy Pratte (JTI-Macdonald), Simon Potter (PMI/Rothmans, Benson & Hedges) presented their arguments for an appeal to Justices Jacques Dufresne, Francois Pelletier and Louis Rochette. Arguing against the suggestion on behalf of the CQCT/Blais and Létourneau classes was Marc Beauchemin. (Many other counsel involved in the case were present in the ornate art-deco court room).
With a time limit on pleadings, by 11:25 a.m. it was all over but the deciding. The justices left the room for no more than 5 minutes, and then returned to announce their agreement that there was no basis for appeal. Marc Beauchemin, whose specialty in this class action lawsuit is covering the Appeal Court went home with yet another win for his side. Justice Riordan may also have felt a little celebratory at the court again upholding his management of this case.
There may be ripples to this decision. Last week, Justice Riordan had postponed deciding whether to reconsider another issue related to scope of questions "at least until after the Court of Appeal has taken a position on the question of the contraband, smuggling."
More Statements of Claim!
This summer a number of provinces filed claims against tobacco companies, and English versions of two of the claims have recently become available. The Quebec government claim, prepared by the province's justice department, is a very detailed (and readable) analysis of tobacco industry actions. The claim for the province of Prince Edward Island is the most recent claim prepared by the legal team that is supporting several provincial actions.
Peter Hoult's second day
Mr. Trudel picked up his questioning of Mr. Hoult and the day proceeded much as it had last week, with the witness speaking readily and at some length.
Much of last Thursday had been spent on general or background questions. Today, Philippe Trudel based almost all his questions on specific documents. They addressed four main themes: marketing to youth, RJR-Macdonald's lack of autonomy from its foreign owners, the marketing of low-tar Vantage cigarettes to discourage quitting, and the use of additives in Canadian cigarettes.
The more cordial and relaxed atmosphere that has taken over the court with the change to JTI-Macdonald witnesses wobbled a little this morning, as Doug Mitchell tried to defend his clients more energetically than he had done last week. For the first part of the morning, he stood frequently with new objections to the introduction of exhibits. Despite their creativity, these concerns seemed no more successful than previous attempts and by the afternoon he had reverted to a more subdued defence.
For example, the first document shown to Mr. Hoult was a 1982 memo showing the company directing the placement of ads for Export A cigarettes in the Junior Hockey magazine, (Exhibit 659). Mr. Mitchell tried to block the document, saying that it had "no evidentiary value."
Justice Riordan gave him a sideways look and asked wryly "is this an objection based on usefulness?" Mr. Mitchel explained that "the prejudicial effect of the document is greater than its probative value."
This novel suggestion did not win the day and a few minutes later Mr. Trudel was able to ask Mr. Hoult if he knew at what age junior hockey is played. Mr. Hoult replied "I don't know the answer to that. I don't know anything about hockey".
It was left unclear whether the prejudicial effect Mr. Mitchell was concerned about was the fact that a game for 16 and 17 year-olds was used as a vehicle for cigarette ads, or that a multinational company would put a man who knew nothing about hockey in charge of a Canadian marketing effort.
The man behind Joe Camel?
Mr. Trudel's next questions centred on Mr. Hoult's involvement with the international marketing of the Camel brand, and his involvement in the re-focusing of that brand's marketing to the youngest end of the market.
It was in his position of International Marketing Vice President for RJR international that he had chaired a strategy session for the Camel brand in 1983. (He worked at RJR-Macdonald from the end of 1979 to 1983 and then again from 1987 to 1988).
The review identified "Young Adult Opportunities" and noted "the key importance of young adults not only to the immediate development and growth of a brand, but also to its long term position in the market." (Exhibit 661). This approach was supported by a detailed strategy plan, originating in RJR's operations in the United States. (Exhibit 660-A).
Mr. Hoult never testified that this strategy resulted in the cartoon Joe Camel campaign, which he oversaw after moving to RJR's American operations after a year as president of RJR-Macdonald in 1987-88. The memory spoke for itself.
The candid campaign
Joe Camel was not the only controversial campaign that Peter Hoult was associated with. He was also a central figure in the Canadian roll-out of the "candid campaign" for Vantage cigarettes. This campaign he explained as an attempt to "offer the smoker a way out of his dilemma when he wanted to smoke lower tar and nicotine cigarettes but his experience was that these cigarettes were unsatisfying."
Mr. Trudel pushed him to clarify whether the smokers dilemma was not also whether or not to smoke. Only when shown a Vantage ad that made this hard to deny did Mr. Hoult acknowledge "I think in this case, yes."
The market research conducted for the Vantage brand shows the care with which the company tested health impressions of the brand (Exhibit 662 665), and modified it for a changing market (Exhbit 663 663A 664 ). Vantage was given a heavy marketing push (Exhibit 667) and was eventually supported through a more traditional lifestyle campaign (Exhibit 672).
Mr. Trudel introduced documents which showed that the marketing of Vantage in Canada was aligned with the desires of US-based owners. It also shows that the company decided to proceed with its "candid" campaign despite knowledge that this triggered public concerns. (Exhibit 666, 671).
See more samples of Vantage ads in exhibits 572, 572A, 572B, 572C, 572D, 572E, 572F, 572G)
Losing the tempo
Another controversial campaign conducted by RJR-Macdonald concerned Tempo cigarettes. Under development for some years as the "third family" for RJR-Macdonald, Mr. Hoult revealed there were high hopes the brand would fill a market void that its Export and Vantage families didn't. (The Canadian plant was again working closely with head office -Exhibit 668).
 |
| Exhibit 670 - Tempo ad designs |
Putting the nicotine back in G-13
Last Thursday, Mr. Hoult had testified that RJR applied nicotine when manufacturing reconstituted tobacco.
"It was called a G-13 process, so I won't get into detail, except to say it expanded the tobacco like puffed wheat.... In part of this process the nicotine was extracted and it was therefore out of balance; therefore, the nicotine was put back."
Today the trial was told that this nicotine-adjusted G-13 tobacco was present in virtually all of the cigarettes made by RJR-Macdonald, and that it made up more than one-third of the tobacco in one brand (Macdonald Select Ultra Mild) (Exhibit 673, 673A).
Additives - natural and unnatural.
This trial continues to gather evidence of the intrigue that surrounded that the use of additives in Canadian cigarettes.
Today we learned that RJR's senior scientist, Derick Crawford, did not agree with the collective decision of "the CTMC presidents" that all flavours were on the Hunter of German Lists (of approved cigarette additives), and that RJR-Macdonald had a "specific request" from its USA 'sister company' to maintain the regulatory status quo in Canada. Mr. Crawford was concerned that three of the additives used by the company were on neither the Hunter nor German lists. Two of them were listed on the FEMA/GRAS list used by the American companies and one was a newly introduced "natural tobacco extract" with the "least concern from a toxicological point of view." (Exhibit 674)
The company's dilemma could be addressed if "natural tobacco extracts" were included on either the Hunter or German lists of permitted compounds. Sure enough, a couple of weeks later, Mr. Crawford is discussing the issue with the CTMC technical committee. Hearing that "'nature identified substances" were accepted on the German list, he takes comfort that "this would then clear our 'natural tobacco extract' used on Macdonald Select." (Exhibit 612-D)
The trial had already seen that Macdonald Select had high use of "nicotine-adjusted" G-13 reconstituted tobacco, and also that it was made with "natural tobacco extract." Mr. Trudel put two and two together and raised the issue of whether nicotine was the natural tobacco extract that had recently been put into use at RJR-Macdonald.
Mr. Hoult acknowledged that nicotine was a natural extract, but did not volunteer that it was the additive referred to in 1982.
He was then reminded of a memo sent to him in 1987 when RJR-Macdonald was facing the likelihood of having to disclose its additives to government. "We may have a unique additive which enables us to achieve product superiority to competition through the use of DM, and as such would not want to divulge it," Mr. Crawford had written him. (Exhibit 636)
The suggestion that DM was a form of nicotine was in the air when Mr. Trudel asked Mr. Hoult "What is DM?"
"I don't know"
"Presumably you asked?"
"Presumably I did, but I have no recollection of what it was or its characteristics."
Will the mystery of DM ever be revealed?
A premier idea - but not a marketable one.
Will the mystery of DM ever be revealed?
A premier idea - but not a marketable one.
Towards the end of the day, Mr. Trudel turned to the topic of RJR-Macdonald's involvement in the plans for "Premier Cigarettes" (Project SPA). Mr. Hoult explained this as a project aimed at selling a non-burning cigarette, and the desire of the company for government approval of its benefits. In the end it was not lack of approval that killed plans for it to be sold in Canada, he said. It had failed market tests in the United States. "It tasted terrible," he said. "It was clearly a lemon - a metaphoric lemon."
Mr. Hoult will testify again on Wednesday and Thursday. Tomorrow another former RJR-Macdonald scientist, Mr. John Hood, will testify.
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: https://tobacco.asp.visard.ca
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.
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: https://tobacco.asp.visard.ca
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.
Thursday, 27 September 2012
Day 63: Smooth Character
See note at the end of this post for information on accessing documents
Over the past few weeks, participants and onlookers to the Quebec tobacco class action suits have been introduced to some of the men who have presided over the manufacture of Export A cigarettes.
The first two presidents were an autocratic father, Walter Stewart, and his hapless son, David. These men ran the family-owned Macdonald Tobacco Company until the early 1970s when it was purchased by RJR International. They were introduced posthumously, through a colourful memoir by a former employee, the 92 year old Peter Gage.
The third was the current president of JTI-Macdonald, and Regional president of the Americas for Japan Tobacco International, the very polished and carefully-spoken Mr. Michel Poirier, who testified only last week. (RJR International was acquired by JTI at the turn of this century).
Today the trial met a fourth president, one of the many executives rotated through the company while it was owned by RJR-International.
His name is Peter J. Hoult, and he worked at RJR-Macdonald for a total of seven years in the decade between 1979 and 1988. His tour of duty in Canada was a short part of a career that saw him work for other RJR companies in Geneva, in Hong Kong and in the United States, where he still lives.
This is not Mr. Hoult's first time testifying in a Montreal court. He was a witness during the tobacco industry's constitutional challenge to the Tobacco Products Control Act (C-51), and his testimony from those trials is available on the Legacy site.
Mr. Hoult has not worked in the tobacco business for a number of years. He was forcibly retired in the after-burn of the take-over of the company immortalized in Barbarians at the Gate. Like the smooth character, Joe Camel, whose ad campaigns he once oversaw, Mr. Hoult is now a piece of tobacco marketing history.
By his looks alone, Mr. Holt would be easy to miss, with the nondescript appearance many prosperous men of his age (68). But he has a distinctive voice, with a melodious professional-class British accent that has endured more than 40 years in the new world.
"Let the witness answer the questions"
Mr. Hoult uses his voice well - and at length. When Philippe Trudel, the plaintiff lawyer asking questions today, made attempts to shorten or refocus the answers, he was corrected by Justice Riordan. Was that the sound of yet another witness schedule flying out the window?
It's not tobacco that causes disease, it's less rigorous statistics.
When asked about giving smokers more detailed warnings than those in the voluntary code, Mr. Hoult replied that since over 80% of smokers believed that smoking caused cancer, "any further message would have been redundant. ... what more could we do?" He maintains that the science on smoking and disease is "by no means as black and white as certain advocates would state" and suggests that the widespread acceptance of causality may be because “statistics are a little less rigorous today.”
Science as a Public Relations
Mr. Hoult confirmed that the company had done no original research into the health effects of health implications of its products. Nor had it invested any more than a "derisory" amount in outside research in Canada. He pooh-poohed the scientific value of the research that was funded by the CTMC.
"If it wouldn't make any difference, why spend any money?" Mr. Trudel asked. Mr. Hoult rattled off the answers: "it was clearly expected, it wouldn’t do harm, we could afford it -- and it was possibly good PR."
Do as the lawyers say and purge the records of references to youth
In the early afternoon, Mr. Trudel began to show the witness documents from his era at RJR-Macdonald. The first chronicle the efforts of Mr. Hoult to follow the directions of the RJR-International president based in Winston Salem and "purge our files of references to ages below 18 years." (Exhibit 656A, 656) The enforcers on the policy were the company's lawyers, Sam Witt III in the U.S. and Guy-Paul Massicotte in Canada (Exhibit 656B).
But that doesn't mean you have to stop researching them
RJR-Macdonald nonetheless continued to receive information on "targeting teens." (Exhibit 657). They purchased custom reports on the same "Youth Target 1987" study that was presented earlier in the trial in the version commissioned by Imperial Tobacco (as exhibits 520-CRY27). The study in both iterations examined the attitudes, lifestyles and tobacco practices of Canadians aged 15 to 24.
[The court had seen previous testimony that Imperial Tobacco, as an original architect of the study, thought that Labatt's and Imperial, would retain "exclusivity in their respective industries" (Exhibit 292-87). It's not clear whether the two tobacco companies knew they were paying for near-identical "proprietory" research.]
It was about a month ago that the same study had been shown to Mr. Ed Ricard and plaintiff lawyer, Bruce Johnston, had made the compelling suggestion that Imperial Tobacco had also purged references to children under 18 from its research reports, but had continued to include data on younger age groups in their studies.
Mr. Hoult, likely unaware that he was effectively testifying against his one-time competitor, explained that adjusting numbers as Ed Ricard had said was done with the studies would be "enormously expensive" and would "fly in the face" of the omnibus approach.
His own company had put a new label ("Young Adults") on the report before circulating it internally. (Exhibit 658C)
Mr. Hoult's testimony will continue on Monday. My bet is that one more day won't be enough of this witness....
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: https://tobacco.asp.visard.ca
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.
The third was the current president of JTI-Macdonald, and Regional president of the Americas for Japan Tobacco International, the very polished and carefully-spoken Mr. Michel Poirier, who testified only last week. (RJR International was acquired by JTI at the turn of this century).
Today the trial met a fourth president, one of the many executives rotated through the company while it was owned by RJR-International.
His name is Peter J. Hoult, and he worked at RJR-Macdonald for a total of seven years in the decade between 1979 and 1988. His tour of duty in Canada was a short part of a career that saw him work for other RJR companies in Geneva, in Hong Kong and in the United States, where he still lives.
This is not Mr. Hoult's first time testifying in a Montreal court. He was a witness during the tobacco industry's constitutional challenge to the Tobacco Products Control Act (C-51), and his testimony from those trials is available on the Legacy site.
 |
| 1989 After he left Canada, Mr. Hoult oversaw RJR's marketing of Joe Camel. |
By his looks alone, Mr. Holt would be easy to miss, with the nondescript appearance many prosperous men of his age (68). But he has a distinctive voice, with a melodious professional-class British accent that has endured more than 40 years in the new world.
"Let the witness answer the questions"
Mr. Hoult uses his voice well - and at length. When Philippe Trudel, the plaintiff lawyer asking questions today, made attempts to shorten or refocus the answers, he was corrected by Justice Riordan. Was that the sound of yet another witness schedule flying out the window?
It's not tobacco that causes disease, it's less rigorous statistics.
When asked about giving smokers more detailed warnings than those in the voluntary code, Mr. Hoult replied that since over 80% of smokers believed that smoking caused cancer, "any further message would have been redundant. ... what more could we do?" He maintains that the science on smoking and disease is "by no means as black and white as certain advocates would state" and suggests that the widespread acceptance of causality may be because “statistics are a little less rigorous today.”
Science as a Public Relations
Mr. Hoult confirmed that the company had done no original research into the health effects of health implications of its products. Nor had it invested any more than a "derisory" amount in outside research in Canada. He pooh-poohed the scientific value of the research that was funded by the CTMC.
"If it wouldn't make any difference, why spend any money?" Mr. Trudel asked. Mr. Hoult rattled off the answers: "it was clearly expected, it wouldn’t do harm, we could afford it -- and it was possibly good PR."
Do as the lawyers say and purge the records of references to youth
In the early afternoon, Mr. Trudel began to show the witness documents from his era at RJR-Macdonald. The first chronicle the efforts of Mr. Hoult to follow the directions of the RJR-International president based in Winston Salem and "purge our files of references to ages below 18 years." (Exhibit 656A, 656) The enforcers on the policy were the company's lawyers, Sam Witt III in the U.S. and Guy-Paul Massicotte in Canada (Exhibit 656B).
But that doesn't mean you have to stop researching them
RJR-Macdonald nonetheless continued to receive information on "targeting teens." (Exhibit 657). They purchased custom reports on the same "Youth Target 1987" study that was presented earlier in the trial in the version commissioned by Imperial Tobacco (as exhibits 520-CRY27). The study in both iterations examined the attitudes, lifestyles and tobacco practices of Canadians aged 15 to 24.
[The court had seen previous testimony that Imperial Tobacco, as an original architect of the study, thought that Labatt's and Imperial, would retain "exclusivity in their respective industries" (Exhibit 292-87). It's not clear whether the two tobacco companies knew they were paying for near-identical "proprietory" research.]
 |
| Near identical studies on youth sold to ITL (exhibit CRY-527) and RJRMI (Exhibit 658A) |
Mr. Hoult, likely unaware that he was effectively testifying against his one-time competitor, explained that adjusting numbers as Ed Ricard had said was done with the studies would be "enormously expensive" and would "fly in the face" of the omnibus approach.
His own company had put a new label ("Young Adults") on the report before circulating it internally. (Exhibit 658C)
Mr. Hoult's testimony will continue on Monday. My bet is that one more day won't be enough of this witness....
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: https://tobacco.asp.visard.ca
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.
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