MONTREAL, Aug. 14 /CNW Telbec/ - Marking tobacco packages with special
tax stamps will not have any effect on the rampant growth of illegal tobacco
sales, warned the Canadian Tobacco Manufacturers Council (CTMC) today. Indeed,
it is likely to make the problem worse.
Illegal tobacco sales are up 30 percent over last year. The CTMC is happy
to see the federal government recognizes that the issue requires government
action. However, this well-intentioned initiative will have no impact on the
real problem. This very costly idea ignores the reality of contraband tobacco:
illegal cigarettes are manufactured illegally and criminals do not obey the
Manufacturers of illegal cigarettes do not comply with the numerous
federal regulations and laws regarding tobacco products, including current
stamping requirements, health warnings and reporting requirements. They also
do not comply with the laws regarding the marketing of tobacco. Their products
are illegally advertised on road signs, illegally discounted, and illegally
sold. They will certainly not comply with stamping and their products will
continue to be sold without appropriate taxes.
Law enforcement authorities do not need markings on legal products to
distinguish them from the illegal variety, which are either sold in clear
plastic bags of 200 cigarettes for a few dollars, or in packages that most
often do not apply the required health warnings.
The only people who will comply with the new marking requirements are
those who presently comply with the law, namely, the legal manufacturers.
These costly measures will only increase the gap between prices of legal
cigarettes and illegal ones.
A study conducted by GfK Research Dynamics and commissioned by the CTMC
found the majority (62.5 percent) of illegal tobacco is sold in clear plastic
bags without any packaging and purchased through informal channels or directly
from First Nations reserves. The results of the study showed that 22 percent
of cigarettes purchased in Canada are illegal, up from 16.5 percent in 2006.
The CTMC believes in a broad approach to curbing the increase of illegal
tobacco sales. Illegal tobacco sales are hurting many segments of the economy.
More importantly, however, they are making cheaper cigarettes available to
youth. Illegal sellers of tobacco do not ask for proof of age.
There is no single answer to this problem. The growth of illegal tobacco
sales can only be stopped through enforcing the laws of Canada, public
education on the social consequences of illegal tobacco sales and political
agreement at all levels. The member companies of the CTMC are committed to
invest in these solutions.
The CTMC is made up of Canada's three largest tobacco companies: Imperial
Tobacco Canada, Rothmans Benson and Hedges Inc. and JTI-Macdonald Corp.
For further information:
For further information: Catherine Doyle, Imperial Tobacco Canada, (514)
932-6161 x2113; Karen Bodirsky, Rothmans, Benson and Hedges Inc., (416)
442-3660, Cell: (416) 671-7579; David McCullagh, JTI-Macdonald Corp., (905)