Imperial Tobacco Canada Files a Lawsuit

Imperial Tobacco Canada Ltd. has decided to intervene in the debate on smuggling cigarettes, starting a $1.5-billion lawsuit against contraband tobacco producers and retailers on First Nations reserves.

“We work with more than 200 laws and regulations. There is no reason why tobacco producers on First Nations reserves should be discussed differently from legal producers. This is what our lawsuit is all about,” Eric Gagnon, a representative for Imperial Tobacco said.

Imperial Tobacco Canada Files a Lawsuit

Imperial also plans to join small manufacturers – whether working legally or not – in as third parties to a lawsuit it faces from Ontario government, which is charging big tobacco companies, including Imperial Tobacco, for health-care cost resulting in tobacco related illnesses.

In case all declarations of the Ontario government are true, then tobacco manufacturers selling on reserves in Ontario will have to respond to similar claims faced by the Imperial. The government should target all tobacco producers for causing health-care costs.

Shawn Brant, who is the owner of the Two Hawks tobacco store in Tyendinaga, stated he received papers from Imperial. “We are ready to struggle; I was shocked to find that my company would go after First Nations tobacco businesses and threaten an industry that has improved standards of living.”

“I think that the given lawsuit against such businesses is a move by Imperial to delay legal proceedings with the province,” Brant said.

The government of Ontario started its lawsuit in 2009. It will probably take years to settle, stated Michael Perley, chief manager of the Ontario Campaign for Action on Tobacco. It is evident the province didn’t not target smaller manufacturers on reserves because this lawsuit pays attention to marketing actions and advertising, and not illegal activity, he stated.

Tobacco manufacturers should have license in order to produce and sell tobacco products. Due to particular exception from charges for First Nations, retailer on reserves can sell tobacco products to Status Indians without imposing taxes.

However, Gagnon declared that there are a lot of illicit retailers, selling tobacco products under the table, without paying taxes and taking away market share from licensed tobacco companies as Imperial Tobacco.

“They are selling to children; they do not collect taxes and do not respect the display and labelling regulations. As government doesn’t want to undertake particular measures, we have decided to move forward,” Gagnon said.

“I believe that there is need in a better and adequate regulation. We support the tobacco industry by at the same time we understand that new regulations should be introduced, stated Joe Delaronde, a representative for the Mohawk Council of Kahnawake.

Mr. Delaronde also added that First Nations have been demanding for their own tobacco regulations for years because the present foul-up in provincial and federal regulations has certain gaps which permit contraband action to prosper.

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