Quebec Factory Closure Threat

Source from:  Tobacco Reporter 09/28/2009

Rothmans, Benson & Hedges is threatening to close its Quebec factory if the Canadian government does not narrow the scope of a bill aimed at stopping the manufacture of candy- and fruit-flavored cigarettes and cigars, according to a report by Steven Chase for the Globe and Mail. The company, which is owned by Philip Morris International, says the bill is too broad. As well as banning tobacco products with characterizing flavors, as happened earlier this week in the US, the Canadian legislation would ban also American-blend products that use flavors simply to mask the harsh taste notes produced by certain tobaccos. Rothmans spokesman, Bert Van Gossum, said that whereas his company backed efforts to ban fruit- and candy-flavored cigars and cigarettes, if the legislation were not fixed it would undermine Rothmans' current business plan in Canada, where it employs about 750 people, more than 300 of them at its Quebec factory. Although most of the cigarettes consumed by Canadians are Virginia-blends, Van Gossum said that a key motivation for PMI's purchase last year of a 100-per-cent interest in Rothmans was to take advantage of excess manufacturing capacity in Canada, including the Quebec plant, to make PMI's global brands for export markets. Anti-smoking groups say an amendment that allowed additional flavorings would create a loophole that could be exploited by the tobacco industry to make cigarettes taste better. Enditem