Responsible Tobacco Retailing Commitment – Communication - Compliance Presented by: Alan Lieberman State of California Mike Roman ExxonMobil U.S. Fuels Marketing Heather Buck ExxonMobil U. S. Fuels Marketing April 2006 Washington, DC ``

2 Discussion Points `` The AG Task Force Corporate and Business Ops Perspective  Operating Issues  Training and Implementation Guiding Principles: Commitment - Communication - Compliance

3 Task Force `` Attorney General Tobacco Retailing Task Force In 2000, a group of State Attorneys General began working with ExxonMobil and other major national retailers to ensure that the retailers have systems in place to prevent the sale of tobacco products to anyone under the legal purchase age. Task Force reviewed FDA and State compliance check data reflecting the frequency with which various tobacco retailers made unlawful underage sales. Task Force reviewed research, consulted with experts on tobacco retailing, and, with retailers, developed model “best practices” in tobacco retailing.

3 Task Force `` Attorney General Tobacco Retailing Task Force The Attorneys General have entered into Agreements (“Assurances of Voluntary Compliance”), to date, with: ExxonMobil Walgreens BP Wal-Mart ARCO Rite-Aid Safeway 7-Eleven ConocoPhillips CVS Task Force continues to monitor store performance by reviewing AVC compliance check results and state and local government inspection data and discussing issues and developments with the companies.

4 Corporate and Business Operations `` Tobacco and related sales are a visible and important retailing area that needs consistent focus and attention to ensure compliance Tobacco related sales are an important non-fuel revenue component in the petroleum retailing / convenience retailing industries ExxonMobil / Task Force meetings and discussions - We continue to share information concerning our business practices: - to improve compliance results - to enhance measures to curb sales of tobacco products to minors - to provide opportunities to share best practices ExxonMobil’s program is directly targeted at Approximately 930 company operated stores Over 13,000 franchise dealer and distributor operated sites

4 Corporate and Business Operations `` The changing landscape of numbers of company operations, direct dealers, and distributors creates potential compliance challenges for ExxonMobil and the industry: More distributor operations mean that communication of compliance requirements needs to be reinforced through additional operating and ownership levels While the importance of tobacco retailing is very important throughout the industry, the number of sites that are operated by third-parties under distributor franchise agreements means that monitoring compliance must take place by distributor reps, their dealers and store managers. The Responsible Retailer forum can play a substantial role by helping To provide a venue for the sharing of best practices, training, and research, e.g. Robert Wood Johnson Foundation Study

5 Corporate and Business Operations `` Operating Issues: ExxonMobil has determined that our approach to responsible tobacco retailing must focus on the following challenges: Ownership –> Commitment – Communication - Compliance Hiring Practices Training Monitoring / Compliance Written Business Practices Assist operators in maintaining good-faith efforts at their sites Leverage internal and external resources to continuously improve performance

6 Corporate and Business Operations `` Training and Implementation ExxonMobil has determined that our approach to responsible tobacco retailing must focus on the following challenges: Ownership and Commitment - Responsibility - Who are the stakeholders? -Corporate -Store Manager -Sales Associate -Customers and Communities where we operate Hiring Practices -Checking background on new hires -Be sure new hires understand that compliance with youth access laws and policies affects compensation and promotion Training -Ensure that all new hires understand the “Rules” and commitment -Access to available training materials -Communication with state and local agencies to identify what works

7 Corporate and Business Operations `` Training and Implementation Monitoring / Compliance -Internal and External Compliance Checks -Create Awareness and Expectation -Understanding various state and local requirements (signage, licenses) -Warnings and recognition - compliance credits -Government Inspections Written Business Practices -Development of “Follow the Rules” -Need as much consistency as possible as we work with local agencies Maintaining good-faith operator efforts -Developing communications to assist all retailers -Sharing company operation practices with all retailers -Discussing responsible tobacco retailing with our retailers -Ensuring that retailers are training their personnel and using the tools -Ensuring that we know when a retailer has a notice of violation Working with and Leveraging Capabilities of Outside Resources - Responsible Retailer Forum- R. W. Johnson Foundation Study

8 Committment `` Guiding Principles Our goals were, and continue to be to: - Communicate - Share ideas and learn what would work and not work - Make our effort collaborative with those of agencies & authorities - Exhibit and maintain a “Commitment” to solving the problem - Demonstrate commitment at the store level - Become a leader in the area of “responsible retailing” - Work toward continuous improvement

10 `` Discussion Questions?