Annual report 2010 - Imperial Tobacco Group

Corporate Responsibility continuedStrategy Performance Governance Financialswarehouse storage and logistics service providers. Moredetail on our product supply compliance is available onour website.We have also further improved our internal processesto provide greater support, resources and intelligenceto authorities when notifying them of seizures of illicittobacco products.We have progressed implementation of new technology intoour production and logistics processes to further improve ourtracking and tracing capabilities for finished tobacco products.In addition, we continued to enhance our general training,communication and awareness of illicit trade. For examplein Poland we have run a series of workshops for customsofficers, where attendees were shown the scale and sourcesof tobacco products smuggled into Poland and the methodsof identifying legal and illicit products.Regulatory EngagementWe continue to engage with regulators and governmentauthorities in support of reasonable and practical regulation.We recognise we are a company that manufactures and sellsa controversial product. We continue to oppose regulationthat undermines the rights of our consumers to enjoy smokingand our commercial freedoms such as product display bansand further encroachment on our packaging, including theplain packaging of tobacco products.Key drivers of regulation are national governments, theEuropean Commission, through the European UnionTobacco Products Directive (EUPTD) and the World HealthOrganisation, through the Framework Convention onTobacco Control (FCTC).We seek proactive engagement with these bodies throughongoing dialogue and by providing detailed submissions toregulatory consultations.This engagement is both as an individual companyor subsidiary, or via various industry associations suchas the Confederation of European Community CigaretteManufacturers (CECCM), the European Smoking TobaccoAssociation, and the European Cigar ManufacturersAssociation (ECMA). We have developed joint industryposition papers to be used with a wide spectrumof European stakeholders, as we strive to achieveworkable regulations.It is regrettable that the FCTC continue to ignore the tobaccoindustry as a legitimate stakeholder in the various debatesthat are ongoing.This exclusion is symptomatic of attempts to denormalisesmokers and smoking, and is something we continueto resist.Ahead of the 4th Conference of the Parties to FCTC inNovember 2010 we consulted with governments on theguidelines being developed and debated which includeproduct regulation, education, cessation and alternativesto tobacco farming.In terms of specific regulation, we remain especiallyfocused on the situation in Australia where the governmenthas announced plans for the plain packaging of tobaccoproducts with effect from July 2012. Plain packaginglegislation has never been implemented by any governmentin the world and we are robustly challenging this proposal.As well as depriving us of our registered trademarksand diluting the value of our brands, we have particularconcerns about the impact plain packaging would haveon illicit trade. Making all tobacco products available inthe same, easy-to-copy generic plain packaging wouldlead to a significant rise in counterfeit product, adverselyaffecting governments, retailers and consumers as wellas the legitimate tobacco industry.50