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    Ontario Retailers Hurt By Contraband Cigarette Sales

    Store association estimates one-half of all cigarettes smoked are not taxed.

    ONTARIO -- Convenience stores in Ontario, Canada, are seeing 40 percent of tobacco sales going up in smoke—which they say is because of contraband cigarettes, according to a report by The Tribune.
    Ontario Convenience Stores Association President Dave Bryans told the newspaper an estimated 21 percent of all cigarettes consumed in 2007 were illegal. In 2008, that figure grew to an estimated 32 percent. This year the association estimated a whopping 50 percent of cigarettes smoked are non-taxed.

    "It's growing in double digits every day," Bryans told the newspaper. "Today it's a crisis for convenience stores, neighborhoods, schools and society."

    A study published the Canadian Medical Association Journal found approximately 13 percent of high school students who are daily smokers regularly smoke illegal cigarettes. In Ontario, nearly 22 percent of youth smokers regularly light up illegal cigarettes.

    The reality, said Bryans, is that cigarettes being sold at reservations or out of the trunks of vehicles are easily accessed by young people who aren't old enough to purchase legally taxed cigarettes from stores. The cheap price, he said, makes it even more enticing for young people to experiment and pick up the habit.

    But even adults are turning to the contraband cigarettes because of the rock-bottom prices, he said.

    At Bridgeport Variety in Port Colborne, owner Joe Lyu told the newspaper 80 percent of his sales come from tobacco and he has seen a 40 percent drop in those sales.

    At the Dairy Maid Shoppe in Welland, owner Michel Papineau said he been hit hard in sales of tobacco products. "Remember that each customer lost on tobacco is impacting the sales of impulse items such as gum, pepperettes, pop and snacks" he told the newspaper.

    "The average mom and pop convenience stores have suffered a decline of about 30 percent in sales [over] the last three years, about $250,000 in gross sales or $35,000 in gross profits to pay bills or wages,"

    The c-store association supports outlawing the supply of supply tobacco products, such as papers, packaging and leaf to unlicensed tobacco factories, as well as the possession, purchase or consumption of contraband products.

    Canada is being flooded with untested, unregulated and untaxed cigarettes, Bryan told the newspaper. Untaxed cigarettes are costing the government more than $1 billion every year, he said.

    Papineau was quoted as saying contraband cigarettes are "the straw that broke the camel's back" for convenience stores.

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