Smoking falls to lowest level in 50 years

Smoking falls to lowest level in 50 years

Cigarette firms say sales figures hide toll from smuggling

Brad Evenson

National Post Thursday November 282002

Thursday, November 28, 2002

OTTAWA - Cigarette smoking has plummeted to its lowest level in half a century, new statistics show.

According to Statistics Canada, sales fell to 37 billion cigarettes in the first 10 months of 2002 from 39.9 billion in the same period a year ago. That is an 8% drop in per capita sales, the biggest year-to-year decline in 30 years, according to the Non-Smokers' Rights Association.

Since 1999, consumption in Canada has fallen at more than triple the U.S. rate of decline -- 17.5% versus 5.5%.

"This is great news," said John Garcia, president of the Canadian Council for Tobacco Control.

"It shows that Canada's co-ordinated and comprehensive tobacco control strategy is working to reduce the tobacco epidemic along with the human and financial costs associated with it."

However, tobacco companies say the sales figures hide a growing trade in contraband cigarettes.

"We are hearing a lot of stories about product coming off of the [First Nations] reservations ... and this is all as a result, of course, of the high taxation policies," said John McDonald, spokesman for Rothmans Benson & Hedges, the country's second-largest tobacco manufacturer.

Although the federal government has raised excise taxes on cigarette exports in an attempt to curb smuggling, Mr. McDonald said it is naive to think this will stop the practice. He said contraband cigarettes will come from offshore.

"Offshore -- meaning the Far East, certainly Europe, any number of places," he said.

"In this day and age, being able to ship product globally is not a major effort and if governments create the market for the criminal element, that's what happens."

In recent years, provinces across Canada have sharply raised tobacco taxes. Last year, the price per carton rose by $18 in Alberta, the largest such tax increase in the world. The average price for a carton of 200 cigarettes has risen to $58 from $36 last year.

Further depressing sales, municipalities such as Toronto and Ottawa have banned smoking in restaurants. Ottawa required all brands to post graphic new warning labels on products, and by next October, sponsorship advertising will be banned under the federal Tobacco Act.

"Canada's tobacco control strategy has brought us close to a major breakthrough in addressing the tobacco epidemic," Mr. Garcia said.

Next week, when tobacco control experts meet in Ottawa for the Third National Conference on Tobacco and Health, many are expected to call for higher taxes, an elimination of point-of-purchase displays and a ban on the use of such terms as "light" and "mild" in tobacco advertising.

According to Statistics Canada, weak domestic demand drove cigarette sales down by 6%. When fine-cut, roll-your-own tobacco was accounted for, overall sales fell by 8% in the last year.

But tobacco companies say the federal agency's numbers are misleading.

John Wildgust, director of corporate affairs at JTI-Macdonald Corp., said tobacco companies raised their prices by $1 a carton in September, so retailers stocked up early.

"They load up the pantry, which is what happens whenever there is some kind of a price increase and they have an opportunity to stock up before the price increase takes effect. So that certainly explains why there would be a difference in sales," Mr. Wildgust said.

He said the tobacco industry expects a real decline of tobacco consumption in Canada of 3% this year, consistent with the trend in previous years.

bevenson@nationalpost.com

© Copyright  2002 National Post