Convenience store owners warn of native smoke shacks

Over the past five years, Peter's Place convenience store proprietors Shirley Reed and Mark Ambeault say they've experienced a 50 percent decline in tobacco sales.

"We used to buy 500 cartons of cigarettes a week for the store," says Reed. "That's now dropped to 150 cartons a week."

Peter Seemann, Ontario regional coordinator for the Canadian Convenience Stores Association, was on hand today at Peter's Place on Great Northern Road as part of an Ontario-wide tour to raise public awareness of the contraband tobacco industry.

Reed believes the decrease in sales is the direct result of increased tobacco taxation, which drives customers to seek cheaper alternatives.

Tobacco sales used to represent the majority of the store's income, said Reed.

In order to remain competitive, Peter's Place has begun offering customers additional products and services such as key cutting, clothing and novelty items.

The Canadian Convenience Stores Association accuses the Ontario government of doing next to nothing about the problem.

Below is full text of a news release issued today by the Canadian Convenience Stores Association.

***************************** CCSA brings "Window on Contraband" exhibit to Sault Ste. Marie to expose the inner workings of the contraband tobacco industry in Ontario

Canadian Convenience Stores Association says government's double-standard policy is unacceptable as it creates an un-level playing field for legitimate retailers

SAULT STE. MARIE - (November 18) - In an effort to expose how close to 350 smoke shacks in Ontario and Quebec are making to next to impossible for legitimate convenience store retailers to complete, the Canadian Convenience Stores Association (CCSA) is visiting Sault Ste. Marie as part of a month-long tour of 25 Ontario cities.

The CCSA is pointing fingers at the Ontario government, which despite being the province most affected by contraband, has yet to come up with a plan against the illicit trade of tobacco - something the Quebec and federal governments have already done.

In addition, not only is the Ontario government doing next to nothing, but it continually increases taxation and regulations on the legal market which keep encouraging smokers to turn to contraband.

"Contraband is a problem caused entirely by our governments. By keeping the price of tobacco products excessively high and refusing to enforce legislation on Native reserves, governments have created a huge demand for cheap cigarettes as well as a destructive incentive for vulnerable communities," says Peter Seemann, Ontario's regional coordinator for the CCSA.

On the heels of its 10 percent - 2010 contraband objective campaign, the association representing 27,000 convenience store owners in Canada wants the government to stop regulating and over-taxing the legal tobacco market and start enforcing the law.

To do so, it will reveal the inner workings of smoke shacks - the front-line retailers of illicit tobacco products on Native reservations.

Along with the tour, a rolling exhibition called "Window on Contraband" will travel to each city to illustrate and educate the public about the huge economic and social implications that contraband has on both Native and non-Native communities.

Featuring a unique collection of 100 illegally-sold samples of contraband cigarette packages and cartons as well as flavoured cigarillos, the exhibit offers a front-seat view of the inner workings of this shadow industry.

It will show how contraband is sold, the variety and costs of products available, how the taxation system is evaded, the differences between smoke shacks and convenience stores, and finally, the impact of contraband on retailers and the public.

The contraband industry thrives through the sale of illegal tobacco products via close to 350 smoke shacks on Ontario and Quebec Native reserves:

- These shacks are fueled by 50+ illegal cigarette plants which are financed and operated by a network of sophisticated criminal organizations.

- In Ontario, the Six Nations Reserve near Caledonia is home to 94 smoke shacks selling Ziploc baggies of 200 contraband cigarettes for as little as $11 each in comparison to $80 for a carton of the same quantity on convenience stores.

- In the Kahnawake Reserve near Montreal, Quebec, the CCSA has identified 123 smoke shacks and close to 15 illegal tobacco manufacturing plants.

Double-standards are fueling contraband

"In Mr. McGuinty's Ontario, we have a double-standard when it comes to the sale of tobacco - rules for those who obey the law and another set of rules for those who don't," says Mr. Seemann.

"Throughout the past year, the CCSA has campaigned tirelessly with a clear message - politicians need to commit to reducing contraband to 10 percent in 2010. Obviously, there is still much to do to achieve our goal," says Mr. Seemann. "Now is the time for our politicians, the public and the media to realize the huge transformations that are taking place on Native reservations as the embrace this illegal trade. And we must not forget the huge economic and social implications that contraband has on all facets of society."

Background

The CCSA represents the economic interests of over 27,000 convenience stores located in every community in Canada that serve Canadians in their daily needs.

The CCSA has developed a basic mission to promote corporate social responsibility and represent responsible community retailing and has developed the "We Expect ID world-class age-testing program for all employees.

The CCSA works to promote and foster professional business practices, standards and ethics throughout the C-store industry, and provides training, education and guidance to its members.

*****************************