Industry says contraband up in Canada, citing own study

Sales of contraband tobacco are skyrocketing and now account for one in three cigarette purchases across the country, according to a new study by the tobacco industry.

Police are seizing more and more contraband smokes each year. But industry leaders say the seizures are merely drops in the bucket and want governments and police to target large-scale manufacturing plants on aboriginal reserves.

“The seizure of illegal tobacco products from the small-time distributors is really addressing the tail end of the problem,” Benj Kemball, president of Imperial Tobacco, said Tuesday from the company’s Montreal headquarters.

“It’s important that you get to both the illegal manufacturing operations as well as the criminal networks that are taking these products off reserves and distributing them across Canada.”

The study, funded by the Canadian Tobacco Manufacturers’ Council and conducted by independent market research firm GfK Research Dynamics, surveyed 2,046 adult smokers in May and June.

Among respondents, 32.7 per cent said they had purchased illicit tobacco products within the previous seven days – up from 22 per cent in 2007 and 16.5 per cent in 2006.

The numbers were highest in Ontario, at 48.6 per cent, and lowest on the Prairies at under four per cent.

Respondents were interviewed in their homes, so the survey team asked to see their cigarettes. Illegal smokes were on hand in 19.3 per cent of homes nationwide and 29 per cent of homes in Ontario.

The GfK Research Dynamics survey is considered accurate within plus or minus 2.2 per cent, 19 times out of 20.

The RCMP say the study, obtained this week by The Canadian Press, is not industry hype – it matches what they’re seeing on the street.

“In our area, we’re way over the amount we seized last year,” Sgt. Michael Harvey said from the RCMP detachment in Cornwall, Ont., near the heart of the contraband trade.

Industry officials and police say the vast majority of illegal cigarettes are manufactured on the American side of reserves that straddle the border in eastern Ontario and southern Quebec. They are then shipped up and down the Trans-Canada Highway in cars, vans and trucks.

Mounties managed to shut down one manufacturing facility on the New York side of the Akwesasne reserve in 2006, and arrested 12 people as part of an alleged smuggling and manufacturing ring. But such efforts take a lot of time and effort.

“Unfortunately, those operations take 14 to 18 months to complete,” Harvey said.

“In the meantime, we can’t ignore the fact that there’s cigarettes coming across every day from those 13 (other) factories.”

The federal government has promised to beef up enforcement efforts. Public Safety Minister Stockwell Day announced a plan in May to target illegal manufacturing plants and disrupt distribution networks.

Police say another challenge is convincing law-abiding citizens to stop buying contraband cigarettes, which can sell for less than a quarter of the price of legal smokes.

“These products are being trafficked by criminal networks who also deal in alcohol, drugs and firearms,” Kemball said.

“It’s not just an economic problem … it’s a social problem that really does threaten the fabric of society in terms of widespread criminal acts.”

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