More Family Run Businesses to Close When Governments Increase Tobacco Taxes
TORONTO, Feb. 26, 2014 /CNW/ - The Ontario Korean's Businessmen's Association (OKBA), is concerned that recent tobacco taxes introduced by the federal government will negatively impact the livelihood of their 1500 members stores in Ontario. Further, the possibility of additional new tobacco taxes in Ontario's spring budget will compound the devastating effects on its member's steadily diminishing revenue.
"Our concern with the tobacco tax increase is the immediate effect it has on our store owner's bottom line" said Mr. Cha. "Smokers don't stop smoking overnight, and unfortunately, history has shown us that increases in government taxes on legal tobacco immediately drive up the amount of contraband tobacco being sold in our communities", he added. "Everyone knows that the people who sell contraband tobacco do not collect or remit taxes, nor do they restrict the sale of tobacco to only adults like our store owners do."
Independent convenience store owners, including the hundreds of members within the OKBA, have been battling the scourge of contraband tobacco in Ontario for years. The OKBA has been pleased with government initiatives on both the provincial and federal levels to finally deal with the problem, but note that new tax increases have the potential to wipe out any recent gains made against the illegal trade.
"Our members started telling us that over the last year they started seeing some regular customers coming back into their stores, having turned away from the illegal market; yet, now we fear new tax increases may turn them away again as they source cheaper, untaxed products", stated Cha. "We applaud governments initiatives against contraband tobacco, however, we fear that history will repeat itself and more of our members will be forced out of business as a result of an un-level playing field when it comes to tobacco pricing", he added.
Since 2010, hundreds of independent business owners of the OKBA have closed their stores as a result of shrinking margins, and competition from the illegal black market. Given the overall reduction in smoking by the adult population, Convenience Store owners have greatly diversified the products and services they sell.
"Our store owners work hard, often 7 days a week and 14 hours a day." claimed Cha. "It's disappointing when they see their already tiny profits further eroded by an illegal black market run by organized crime."
Founded in 1973, the OKBA is a not profit association representing 1500 independent business owners of Korean descent, in hundreds of communities across Ontario.
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