Proposal to Identify Tobacco Packages is Off the Mark

Source from:  MONTREAL, Aug. 14 /CNW Telbec/ 08/15/2007

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 law. 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. Enditem