TORONTO -- The group representing convenience store operators in Ontario has warned that government policies on tobacco are forcing its members out of business, reported The Tillsonburg News.
The Ontario Convenience Stores Association (OCSA) said recently high taxes are doing little to curb consumption. Instead, they have driven smokers into the black market while depriving retailers of cash flow.
Recent research has shown that almost one-quarter of all tobacco sold in Ontario is illegal, OCSA president David Bryans said in a [image-nocss] statement cited by the newspaper. That means adult smokers are taking their business to the black market, denying revenue to Ontario's independent, family-run convenience stores and robbing the Ontario government of millions of dollars of much-needed tax dollars.
He added, With tobacco accounting for anywhere between 45% and 65% of a typical convenience store's total revenues, it becomes clear that the proliferation of the illegal tobacco market unabated will eventually destroy the family-run convenience store industry in Ontario.
Bryans accused Jim Watson, Minister of Health Promotion in the McGuinty cabinet, of misrepresenting the contraband problem to the public. The Smoke Free Ontario Act took effect a year ago. Watson credits the act for an 18% reduction in consumption since last year, said the report.
Bryans said the impact on consumption is closer to a 2% reduction. OCSA said the McGuinty government is making the mistake of attributing the decline in legal, trackable sales to smokers who have given up the habit. OCSA said most smokers have simply switched to black-market cigarettes produced and sold on Indian reservations for as little as $7 a carton.
Watson replied that black-market tobacco is a serious problem; however, he added that it is up to Ottawa to ensure that the laws of Canada are enforced on Indian reservations. We haven't received back a satisfactory response to that, Watson said, according to the paper. We hope the federal government eventually comes to the table and works more closely with us on that.
Otherwise, Watson said the Smoke Free Ontario Act has been a success. He said the no-smoking policy in public places has enjoyed 99.9% compliance. Only 2,800 charges have been laid under the act in the past year. That is quite remarkable, Watson said. It shows the act is both respected and appreciated.
Since March 31 of 2006, revenue officials in Ontario have confiscated 5.1 million illegal cigarettes and 112,000 illegal cigars, the report said. Next year, retailers will have to dismantle the power wall displays of tobacco products normally found behind the cashier in tobacco shops and convenience stores. Retailers will no longer be able to display tobacco products.
Jim Wakeford, co-owner of Max Convenience in downtown Simcoe, told the Tillsonburg News that Bryans' analysis of the tobacco situation squares with his own experience. There's no way, he said, that a retailer selling cigarettes for $72 a carton can compete with native smoke shops that sell the equivalent number of cigarettes for as little as $7. The result, Wakeford said, is more young people smoking than ever.
Now every kid can afford to smoke, he told the paper. It's had the exact opposite effect that they intended. They've driven people to smoke cigarettes that have no controls on quality and no warning labels.
This affects not only high school students, said the report. People of all ages, Wakeford said, have noticed that cheap smokes are available on the reserve. I've been to parties where policemen are smoking them, he said. Prominent people and politicians are smoking them. I can't disagree with them when they're saving that kind of money. The way things are going the tobacco industry is going to be dead and the only people selling cigarettes will be the Indians.
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