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The tobacco files -

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Lateline has obtained evidence that big tobacco companies are driving a campaign which claims to be
run by shopkeepers opposed to plain cigarette packaging.

Transcript

LEIGH SALES, PRESENTER: In August, Lateline revealed the existence of a tobacco industry-funded
campaign against a looming ban on logos and branding on cigarette packets.

From 2012, cigarettes will be sold in plain standardised packages carrying large graphic warnings
against smoking.

It's a world-first, hailed by anti-smoking advocates.

Following our story, we received a stack of documents which appear to be internal emails, invoices
and contracts outlining the precise nature of the involvement of the biggest tobacco company of
them all, Philip Morris, and two other tobacco giants.

After receiving them, we set about confirming every aspect of the documents that we could by
independently verifying timelines and crosschecking the contents against known events.

We checked phone numbers, email addresses, bank accounts and media interviews, plus we rang all of
the companies mentioned.

Only one would talk to us - the Civic Group, a public relations firm employed by Philip Morris.

None of the tobacco companies involved in the campaign would be interviewed.

Peter Lloyd reports on the tobacco files.

CHERYL MOON, ALLIANCE OF AUSTRALIAN RETAILERS (August 4): I do want to make it very clear that the
Alliance in this for the long term.

PETER LLOYD, REPORTER: How deep are the pockets?

CHERYL MOON: Again, it depends on how long the campaign runs. However we do want to see the policy
overturned.

PETER LLOYD: A month ago Cheryl Moon was the public face of the previously unheard of Alliance of
Australian Retailers, complaining that plain packaging of cigarettes was bad for its members,
thousands of ordinary Australian shopkeepers.

CHERYL MOON (August 4): Because it's harder to see them. They're not identified. They all look very
similar. If I am serving customers it's difficult for me to find the right product for the
customer.

PETER LLOYD: Reluctantly Ms Moon acknowledged that the Alliance was getting help from tobacco
companies.

How much have they earmarked so far?

CHERYL MOON (August 4): I haven't received any money by email. There is a ...

PETER LLOYD: There must be an amount you've talked about.

CHERYL MOON: The Alliance has come together to talk about the policy, not about the funding
proposals.

PETER LLOYD: But the funding had already gone well beyond proposal stage.

A week before, on the day the Alliance was set up, it became the instant beneficiary of millions of
dollars from the world's top cigarette manufacturers.

Here is the first document to become public that shows precisely how generous big tobacco was. ITA
is Imperial Tobacco Australia. It gave more than a million. BATA or British American Tobacco
Australia chipped in $2.2 million. And from PML, Philip Morris Limited, a slightly smaller amount:
$2.1 million.

MIKE DAUBE, COUNCIL ON SMOKING AND HEALTH: The campaign is clearly being driven and directed by the
Philip Morris company, but it's also clearly being supported by Imperial Tobacco and BAT. It looks
simply - the funding just looks to be market share driven.

PETER LLOYD: Philip Morris is one of the world's largest producers of cigarettes. In Australia its
corporate base is in Melbourne. Back in May, before the birth of the Alliance of Retailers, its
corporate affairs manager Chris Argent was seeking advice from a lobbying and public relations firm
called the Civic Group. The discussion was about managing a campaign to stop plain packaging laws
during the heat of the federal election.

CHRIS ARGENT, PHILIP MORRIS (male voiceover): "We envision the election being a major decision
point and would like to clearly understand all costs from now until election day."

PETER LLOYD: Philip Morris gives hundreds of thousands of dollars in political donations to the
Coalition, but Argent was clearly worried about the level of support for his company.

CHRIS ARGENT (male voiceover): "Please note that contrary to the proposal the Coalition's 'resolve'
is not 'strong'. It is at best neutral."

PETER LLOYD: The Civic Group is based here in a prestige building in Melbourne's Collins Street.

One of its founding owners is Jason Aldworth. In his proposals to Chris Argent, Aldworth
recommended that the campaign to stop plain packaging of cigarettes should, "... be forthright - at
times even aggressive - in nature (if the campaign fails, you won't have any brands left anyway, so
there is no point worrying too much about damage to your brands)." And that it ought to, "Build
concern among the targeted decision makers that the campaign will not cease, is likely to increase
and that it will extract a political cost."

But Jason Aldworth was worried about working for a cigarette company and the impact.

JASON ALDWORTH, THE CIVIC GROUP (male voiceover): "We would note that the Civic Group currently
acts for several bodies likely to resent a registration on the Lobbyists Code for us to represent a
tobacco company. In this regard, it will be important for us that any final engagement be of
sufficient quantum to make up for the loss of this work."

PETER LLOYD: Significantly, Aldworth's proposal recommended using third parties, including retail
groups, to sell the message. The Alliance of Australian Retailers was born.

CHERYL MOON (August 4): The Alliance is financially supported by three tobacco companies. It's -
again depends on how long the campaign goes. There's no single number; it's about how long the
campaign is expected to last.

PETER LLOYD: Cheryl Moon's unsteady performance prompted some soul-searching behind the scenes.

The Civic Group's Rora Furman suggests Cheryl Moon should stick to prepared talking points. "We are
upfront on our website, in our media release, the tobacco companies are helping fund our campaign.
But that's not the real issue. The real issue is ..."

CHERYL MOON: The Australian Retail Alliance is funded - has funding support from the three
cigarette manufacturers in Australia. We're quite open about that. It's not a secret. It will be on
all of our websites, it'll be on all of the media that's out there.

PETER LLOYD: Two days later, advertisements to stop generic packaging hit the airwaves. In the
middle of the election campaign, tobacco companies were funding ads from a group purporting to
represent the interests of ordinary Australian shopkeepers.

At the end of August, Civic Group sent this invoice to Philip Morris. Top of the bill, a handsome
charge for one month's consulting.

Off camera I spoke to Brett Miller, one of the owners of the Civic Group. I showed him these
documents. He didn't deny that they were genuine and he confirmed that Philip Morris is paying his
company $200,000 a month as a retainer to help manage the Retail Alliance.

The man from Philip Morris, Chris Argent, has no official connection with the Alliance of
Australian Retailers, yet the Civic Group's Rora Furman wrote to him seeking approval on how to
phrase responses to messages received on the Alliance website.

RORA FURMAN, THE CIVIC GROUP (female voiceover): "I'd recommend not responding to emails that are
generally rather offensive and/or use particularly colourful language."

PETER LLOYD: And here Furman seeks permission for the Alliance to speak to a reporter.

RORA FURMAN (female voiceover): "You will see there's also on from retailbiz.com - an online retail
media outlet - with an inquiry ... It is the sort of media opportunity that Craig (Glasby) tends to
do quite well ... Do let me know it you are OK with this and I will set up a time for them to chat
... Rora."

PETER LLOYD: In another email, Chris Argent expresses frustration that the Alliance failed to
respond to requests for an interview from Melbourne radio personality Glen Wheeler.

CHRIS ARGENT, PHILIP MORRIS (male voiceover): "Guys - please see transcript below from MTR
(Melbourne Talkback Radio), where Glenn Wheeler claims to have sent emails to AAR asking for an
interview. Is this correct, and if so, why was this not brought to our attention?"

PETER LLOYD: I went to Philip Morris to try to speak to Chris Argent.

Well we've tried to speak to Mr Argent by phone, email and now here in person, but to no avail. It
seems, according to his staff, that he's not even here.

Professor Mike Daube was one of the medical experts who recommended plain packaging laws. He
believes these documents are possibly the most devastating tobacco industry leak ever seen in
Australia.

MIKE DAUBE: What this tells us is that far from being the innocent retailer's campaign that it
pretends to be, this is a campaign that has been developed, masterminded and run to the finest
detail by the Philip Morris company. Now this is an international company, and it becomes so clear
from these documents that it's been run by the Philip Morris company in association with British
American Tobacco and Imperial.

PETER LLOYD: The Alliance of Australian Retailers exists on the web, but in the real world there is
little evidence of its bone fides.

Until two days ago its registered address was in this building, a residential tower block in
central Sydney, the owner none other than Cheryl Moon.

Moon stopped speaking on behalf of the Alliance a few days after appearing on Lateline.

The furore over tobacco funding of the Alliance has overshadowed the campaign, yet Philip Morris is
forging ahead. This is the latest contract between the company and the Civic Group. It's not
signed, but it proposes phase two of the campaign.

A new advertising blitz is scheduled to begin this weekend built around the anticipated higher
audiences switching onto television coverage of the AFL and rugby league finals matches. One email
talks of a budget of $3.97 million.

MIKE DAUBE: It looks to me as though this campaign has only just started, that we've seen a spend
of around $5 million on the first phase, and now there's another $4 million going into the next
phase. I think this shows us how desperate the tobacco industry is. They're willing to throw
millions and millions, as much as it takes, into opposing plain packaging.

PETER LLOYD: There is also evidence that the US and British parent companies of each tobacco
company are paying close attention to what happens in Australia. At Philip Morris last week, there
was an international phone hook-up. One of those on the line was John Scruggs, a vice president of
the Philip Morris parent company.

The return of the Gillard Government means Labor MPs can expect to hear from Philip Morris.

The Civic Group's Jason Aldworth recommended something akin to a public relations and lobbying war
of attrition.

JASON ALDWORTH (male voiceover): "Effective political campaigns only work when the targeted
decision makers believe that the campaign will be ongoing and intensive. In short, that the
campaign will keep going and keep damaging their political standing unless they change their
position."

PETER LLOYD: Mike Daube and other leading lights of the Tobacco Control Lobby will use tonight's
revelations to push the Australian Consumer and Competition Commission to take action to stop these
advertisements and shut down the campaign to stop plain packaging. If that happens, Philip Morris
will almost certainly head to the High Court to plead that it has the right to protect its brand.

Peter Lloyd, Lateline.

LEIGH SALES: And in a statement to Lateline, British American Tobacco Australasia says it continues
to proudly support the Alliance of Australian Retailers in their campaign calling for
evidence-based regulation and for abandoning the proposal to introduce plain packaging.

Philip Morris has also sent a statement. It says there's nothing new about the fact that Philip
Morris Limited supports the efforts of the Alliance of Australian Retailers, urging the Government
not to proceed with the proposal for plain packaging. "What is disappointing and concerning is that
the documents we understand tonight's program will refer to seem to have been obtained by
illegitimate means."

Imperial Tobacco didn't return numerous calls from Lateline.

Meanwhile lawyers acting for the public relations company the Civic Group contacted the ABC last
night and expressed doubts about the veracity of the documents.

But it should also be pointed out that when Brett Miller from the Civic Group was shown the
documents he didn't deny their authenticity, nor did he in subsequent conversations with our
reporter.

The full statements from the tobacco companies will be posted on our website.

Read statements from the tobacco companies

Read a statement from Philip Morris Limited and a statement from British American Tobacco
Australia.