Customer health and safety
PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures
All tobacco products pose real and serious risks to health.
Risk awareness among consumers is constantly reinforced by health warnings on primary packaging mandated by the majority of governments. Our approach to tobacco harm reduction is to pursue the research, development and test marketing of innovative tobacco products that will have consumer acceptability, and will be recognised by the scientific and public health communities and regulators as posing reduced risks to health. For more information, please see the harm reduction section of this Report.
In the context of possible product deterioration or contamination, our companies follow a common approach to assuring product integrity. This seeks to minimise the risk of product integrity issues arising, through risk assessment and controls across our product design and supply chain, and to ensure the appropriate response capability should a product integrity issue arise through incidents within or beyond our control.
PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services, by type of outcomes
Save as reported elsewhere in these GRIs, no instances were reported by our companies in 2010.
PR3 Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements
Where health warnings on packaging are not required by local laws or regulations, our Health Warnings on Cigarette Packaging policy requires Group companies to comply with any voluntary codes in force or, in the absence of these, to follow Group guidelines in placing an appropriate health warning on primary packaging.
PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labelling, by type of outcomes
See also PR6 and PR7 for details of our voluntary International Tobacco Products Marketing Standards.
In 2010, the following matters were reported by our companies:
- In Brazil, Souza Cruz received fines of BRL 415,800 (£152,946) and BRL 524 (£193) respectively pursuant to two infraction notices issued by the standards authority in relation to samples of a ‘roll your own’ tobacco product, claiming that the average product weight was less than acceptable. In one further case, Souza Cruz awaits the authority’s final decision.
- Souza Cruz is disputing nine infraction notices issued by the health authority for alleged breach of packaging laws based on allegations that the packaging differs from that previously notified and/or that it contains a prohibited advertising message. In each case, the health authority’s decision is pending and no fines have been imposed to date. It is also disputing two further infraction notices, one of which claims that insufficient space is devoted to pictorial health warnings and the other of which alleges that consumers were not sufficiently informed of increases in tar, nicotine and carbon monoxide levels. In both cases, the health authority’s decision is pending.
- Our company in Costa Rica was prosecuted (together with another tobacco company) for using language other than Spanish in terms included on its product packaging. The company successfully defended the charge, but was found liable for providing misleading information by its use of the term ‘lights’. The company’s challenge to the decision was rejected and it has now commenced an appeal. In the meantime a fine of CRC 2,497,000 (£3,074) has been imposed.
£ equivalent based on the same average currency conversion rates as used for the Group Income Statement in our Annual Report 2010.
PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction
For several years, our companies have commissioned an independent customer satisfaction survey among key distribution and retail partners, providing feedback on service quality and other aspects of our business relationship. In 2010, the survey was enhanced to include new methodologies, providing greater focus and allowing it to be coordinated globally by an independent research agency.
The survey covers several of our largest markets. In each market, it benchmarks British American Tobacco against our major local tobacco competitor and the Fast Moving Consumer Goods (FMCG) supplier considered the best locally in serving the same retailers.
Quality of our service is covered across key areas including:
- Trade marketing support;
- Product distribution;
- Overall quality; and
- Customer engagement.
The most recent results for 2010 rate British American Tobacco as the best company overall in 16 of 31 markets surveyed. We were also identified as the best overall company on trade marketing support in 17 of 31 markets surveyed. Full results can be viewed at www.bat.com .
In addition to the global survey, our companies are also encouraged to adopt consumer feedback mechanisms such as call centres, websites and mail response suited to the local environment.
PR6 Programmes for adherence to laws, standards and voluntary codes related to marketing communications, including advertising, promotion and sponsorship
In 2001, we collaborated with other international tobacco companies to establish a set of voluntary International Tobacco Products Marketing Standards (IMS) and in 2007 we updated them, in response to stakeholder dialogue and without the collaboration of the rest of the industry. Our updated Standards include, for example, further procedures for adult verification and responsible use of new media such as the internet and other electronic messaging.
The Standards require that marketing activities should not be aimed at, or particularly appeal to, youth, and not feature celebrities or link tobacco with sporting, professional, social or sexual success. They also state that advertising should not appear in printed publications unless at least 75 per cent of readers are verified as adults and that all marketing materials must carry a health warning as well as the health warnings on product packs.
Group companies must report annually on their level of adherence with the Standards. Adherence by our companies is monitored by our regional audit and CSR committees and updates reported to our Board CSR Committee. For information on adherence to our International Marketing Standards, please see the marketplace section of this Report and PR7.
To download the Standards in full, go to www.bat.com/marketingstandards .