Canada - will higher tobacco prices lead to increase in illicit cigarettes..

April 17, 2009 - Higher tobacco prices make illegal cigarettes even more appealing. The sale of illegal tobacco has reached crisis levels in Canada. One in three cigarettes purchased in Canada is illegal. The numbers reach even more alarming levels in Ontario and Quebec where the problem is most acute. Forty-eight per cent of all cigarettes purchased in Ontario is illegal, while the figure for Quebec is 40 per cent.

Imperial Tobacco Canada, the wholly-owned indirect subsidiary of British American Tobacco p.l.c. (BAT) is Canada's leading tobacco company. Imperial was shocked by the latest in a series of provincial and territorial indirect and direct tax increases on tobacco from the governments of Alberta, Ontario, Manitoba, British Columbia, the Northwest Territories and Quebec that make these provinces even more attractive for Canada's flourishing illegal tobacco industry. (Interesting to note that Imperial Tobacco along with Rothmans Benson & Hedges Inc were involved with cigarette smuggling in the 1990s. September 2008 - Philip Morris International (PMI) completed buyout of Rothmans..)

Imperial Tobacco Canada calls on all levels of government to work together to implement effective and long-term solutions cigarette smuggling problem. Smuggling (illegal, illicit, contraband) denies tobacco company sales income and the government tax revenue income.

Reference: Tax hikes, denial and inaction: Provinces put out the welcome mat to illegal tobacco traffickers, Imperial Tobacco Canada, cnw.ca, 4/17/2009.

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