Imperial Tobacco, Too

Distribution change hampers cigarette deliveries north of the border

MONTREAL -- Hiccups in a new direct-to-retail distribution system by Imperial Tobacco are leaving some convenience stores in Canada with few or no cigarettes.

The tobacco giant announced in May it would be offering direct-to-store delivery of its products across Canada starting in August. As the change was made, retailers found they weren't getting the products they requested, according to a report in The Guelph Mercury.

Amir Ali, owner of Bluebird Variety in Guelph, Ontario, told the newspaper he had completely run out [image-nocss] of Imperial Tobacco products this week and customers have been asking for them. He put an order in last Wednesday that was supposed to arrive on this past Friday.

Imperial's brands include du Maurier, Player's and Matin ae.

Bob Hefkey, owner of the Hasty Market in Guelph, said he's had to order 100 cartons at a wholesaler instead because he's still waiting for a shipment from Imperial Tobacco. "They came along last week and took an order from me for a 100 cartons of cigarettes on Friday to be delivered Monday, and I haven't seen them yet," he told the paper.

The Imperial Tobacco out-of-stock issue comes on the heels of a similar problem in the United States with R.J. Reynolds Tobacco Co., Winston-Salem, N.C. As reported in yesterday's CSP Daily News, wholesalers and retailers in various parts of the country have found themselves running low on RJR products during the past week as the company struggles with a recent change in software and a packaging supply shortage that tied the company's hands. RJR executives said they expect the problem to be resolved within the next two months.

In fact, 57% of the 110 respondents to yesterday's Kraft/CSP Daily News Poll said they've experienced shortages of RJR products during the past month; 33% said they have not experienced problems, and 10% said they have not but expect to.

Meanwhile, Imperial Tobacco spokesperson Catherine Doyle told The Mercury the company's new distribution system is complicated and "it's going to take a little while to iron out the kinks."

Attempts by CSP Daily News to reach Imperial Tobacco Canada for comment were unsuccessful, but the company wants to make sure stores get their products in a timely manner, Doyle told the paper.

The direct-to-retail system made its first delivery on September 5. "This is a massive switch in terms of a business model for us and a distribution model for us," she said.

Stores can still buy from a wholesaler, Doyle said; however, store owners who sign up with the direct-to-retail system can save up to $4 per carton. The response from store owners across the country signing up for the new distribution system was "outstanding," she told the paper.

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