14U. d,.su L010
Source: Imperial Tobacco Limited. Montreal
Contact: Michel Oosc6teaux, Pubfic Affairs Director
(5141 932 6161. local 2361
ITIL STATEMENT ON FEDERAL AND QUEBEC GOVERNMENTS'
ANNOUNCEMENTS CONCERNING MEASURES TO COMBAT
SMUGGLING
Montreal, February 8, 1994 - Imperial Tobacco Limited had mixed
reactions to today's
federal and Quebec governments' announcements of a tobacco tax
rollback and other measures to combat smuggling.
'We are very hany", said ITL Public Affairs 3irector Michel
Desc6toaux. 'that the two governments are acting decisively to
eliminate the contraband Icoacco market. This is clearly in the best
interest of not omy Imperial tobacco anc its employees. but also of
our partners which include growers, suooiiem, distributors and
retailers. Itis "",age later groucs that have suffered the most from
the increase in cigararre smuggling. The tax rollback of substantial
propor'nons, such as the- ones announced today by Ottawa and
C.uebec, and additional onfo-ce-iont measures, are certainly steas in
the rignt direction We hoce -.nev will to suffficient and :uc--e--,* ful.
'However, we view the 3Uf-aX on tobac= manufa". rers as being
boin discriminatory and unfair. Imperial Tobacco has always acted as
a MCensible corn.pany. It is excessive taxes imposed by
governments. that are responsible for -.re development of smuggling.
in 1 992. -re--@sely in ras;-.^so to a r.-m-wernment recue3l that we
voluntahiv limit our ax-cons. !'%-'s duri froo, anc axoor, sales
decreasec by -3-3 percent cver 1 91a 1, bLT ' W 10 avail. Actuady, not
only oid smuggling continue and further increase. but non-Canadian
produc:3 beC3Me prominent :n tho contraband market.
CD
CD
BAT Industries document for Province of British Columbia 13 April 1999

;de@,Lw-.4
'As far as the export tax is concerned. our position remains the same:
it Will stop exports, not smuggling. In other words. our objection is to
the principle upon which it is based. As a matter of fact. the
Canadian experience of the so's has amply demonstrated that the
contraband market is demand driven, not suppiy driven. At that time.
when the federal govwnrrmnt increased itx taxes and made Canadian
cigarettes about twice the price of American cigarettes. smuggling of
American cigarettes into the country expanded dramatically. In 1952.
and then again in 1953, the government reduced taxes. That ended
the smuggling until the late 1 980's, when government tax policy
again created a price differential that invited organized smuggling.
'In conicusion. while we have strong objections to some of the
measures c-entained in the governments' plans to combat smuggling,
ITL is committed, now as in the past. to cooperating with government
authorities and heloing to restore a legal and orderly tobacco market in
Canada.'
30 -
CD
00
BAT Industries document for Province of British Columbia 13 April 1999