Canada: Smoke Hasn''t Cleared in Tobacco Farmers'' Court Battle

Source from:  Sun News  07/09/2014

While Big Tobacco ended its legal fight years ago with the Canadian government over smuggled cigarettes, the smoke hasn't cleared in the court battle with farmers who say they're owed $50 million for their crop.

Late last month, the tobacco companies -- Rothmans, Bensons & Hedges Inc., and JTO-MacDonald Corp. -- lost another attempt to stop litigation by the Ontario Flue-Cured Tobacco Growers' Marketing Board and four farmers who say they weren't compensated for smuggled tobacco that was sold to the companies at the duty-free and export price.

Superior Court Justice Helen Rady decided there are enough issues to merit sending the lawsuit to trial.

The farmers hope to have their case certified as a class-action lawsuit.

The roots of the issue date back to 1986 through 1996, when cross-border cigarette smuggling was at its height.

The most significant source of contraband products were the duty-free cigarettes made of Canadian tobacco, exported to the U.S. and smuggled back into Canada.

The value of the contraband cigarette market was $1.1 billion. It's estimated that one in six cigarettes sold in Canada was contraband.

Controls were put in place to limit the smuggling, and in 2008 and 2010 the tobacco companies entered settlements with both the federal and provincial governments over lost revenue from tobacco smuggling, although they deny any involvement in the activities.

The total payout was $1.7 billion.

The farmers say they weren't parties to that settlement and deserve compensation. Enditem