Tobacco Info

From Tobacco Info No. 2 - September 2010
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Cigarillo distributors sidestepping the new Tobacco Act


“Next generation” of flavoured plus-sized cigar products hit the market


By Joe Strizzi


In an effort to skirt new legislation banning the sale of flavoured cigarillos and cigarettes, Casa Cubana, distributor of Prime Time cigarillos, was the first to introduce a new size cigarillo that circumvents the law. According to its website, “Prime Time Plus cigars have been modified to be 100% compliant with all regulations and requirements for the continued sale of flavoured cigar products implemented by the passage of Bill C-32.”


Other brands followed suit, with Casa Cubana’s resized Bullseye Extra cigars, while competitor Distribution GVA introduced Honey T non-filtered cigars, all of which circumvent the new law’s guidelines for flavoured cigarillos.


Federal Health Minister Leona Aglukkaq has said that some tobacco companies are going against the intent of the law and that she’ll work to close the loophole. “Not only does this action go against the intent of the legislation; it endangers the health of Canada’s children. We will deal with this issue and will continue working to ensure that Canada’s children are protected from the dangers of tobacco.”


In a written statement, Prime Minister Stephen Harper supported the amendments and promised the law would be enforced. “Compliance with these rules will be monitored and enforced in no uncertain terms,” his statement reads. “Adherence to the spirit of the legislation will also be monitored, and, if necessary, the legislation will be revisited.”


The law


Flavoured cigarillos and cigarettes were pulled from store shelves across Canada on July 5, as the final stage of the federal government’s updated tobacco legislation kicked in. The extended restrictions on the advertising of tobacco products came into effect on October 8, 2009, when the amendments received Royal Assent. Effective April 6, 2010, the retail sale, including duty-free sale, of little cigars and blunt wraps packaged in less than 20 units was no longer permitted. Effective July 5, 2010, the retail sale, including duty-free sale, of cigarettes, little cigars and blunt wraps that contain a prohibited additive (all flavouring agents excluding menthol, and certain other additives) was no longer permitted.


Other tobacco products, like (big) cigars and smokeless tobacco products are not covered by the law.


The amendment to the Tobacco Act defines the little cigar as: 1- a roll or tubular construction that is intended for smoking;  2- contains a filter composed of natural or reconstituted tobacco; 3- has a wrapper, or a binder composed of natural or reconstituted tobacco; 4- has a cigarette filter; 5- it weighs no more than 1.4 g, excluding the weight of any mouthpiece or tip.


The legislation also allows for the definition to include any tobacco product that is prescribed to be a little cigar.


Protecting our youth


The goal of the 2009 amendment is an encompassing protection of Canada’s youth. The results of the 2008-09 Youth Smoking Survey, released in conjunction with World No Tobacco Day on May 31, 2010, show that 9%, or 250,000 youths in grades 6-12 smoked cigarillos in the last month. Of note, 85% of youths who smoked just cigarillos considered themselves “non-smokers,” compared to 33% who smoked just cigarettes.


As with cigarette consumption, the higher the grade level, the higher the reported use, and in grades 10-12, 35% of youths reported having ever tried cigarillos.


Rob Cunningham, senior policy analyst with the Canadian Cancer Society, has applauded the efforts behind the revised Tobacco Act.


“Without this law, many young people would have been tempted by this type of flavoured product when they may never have tried a traditional cigarette,” he said. “It’s outrageous what Casa Cubana and others are doing, obviously determined to continue marketing to youth.”


Cunningham argues that tobacco companies know full well who they were targeting with chocolate or vanilla-flavoured products, a new marketing tactic on their part, adding that these flavoured products are just as dangerous as cigarettes because they contain nicotine and thus could lead to addiction.


The first to skirt the new law


Casa Cubana was the first company to officially exploit the loophole. Its newest Plus cigars were altered just enough to satisfy the new regulations. Prime Time Plus cigars exceed the minimum 1.4 g weight requirement, and according to the company, they do not use a cigarette-style filter.


“Because Prime Time Plus weigh more and do not utilize a cigarette-style filter, they are no longer classified as ‘little cigars,’ and are therefore not subject to any limitations on minimum transaction amounts, packaging formats or flavour,” claims Casa Cubana on its website. 


Prime Time Plus will be offered in flip-top hard packs of 10 cigars (10 packages of 10 per carton), 20 cigars (10 x 20 per carton) and singles (Western Canada only), and will be available in a greatly reduced selection of flavours including cherry, grape, vanilla, peach, rum and strawberry.


Anti-tobacco groups, like the Quebec Coalition for Tobacco Control (QCTC), argue that a ban on the introduction of new tobacco products is the only way to avoid problems like this one.


“The tobacco industry has an uncanny way of finding and exploiting loopholes or skirting regulations by modifying their products and marketing. By allowing the industry to put new products and brands on the market, governments are essentially giving companies an opportunity to adapt and sidestep measures,” explained Flory Doucas, codirector of the QCTC.


Adding fuel to the fire


On the same day as the amendment to the Tobacco Act came into full effect, the Canadian Convenience Stores Association (CCSA) denounced the sale of flavoured cigarillos and other tobacco products on Native reserves in Quebec and Ontario.


The CCSA argues that some cigarette vendors on the reserves believe they are above the law, selling large quantities of tax-exempt cigarettes to ineligible buyers, selling to minors and selling flavoured cigarillos in contravention of the new law.


A private investigator hired by the CCSA visited and filmed tobacco vendors on the reserves a week prior to the new provisions coming into force. One of two videos released by the organization on Monday, July 5, shows a 15-year-old girl visiting 10 tobacco shacks on the Six Nations reserve in Ontario. She purchased tobacco products at eight of them with no difficulty and without being asked for identification.


The other video, shot on the Kahnawake and Kanesatake reserves in Quebec, shows the sale of tobacco products, including a range of flavoured cigarillos, at a fraction of the price they sell for at convenience stores, and without tax.


“For the first time, we are showing Canadians that the irresponsible large-scale selling of contraband tobacco on Native reservations is nothing but a national disgrace caused and tolerated by the federal government,” said CCSA senior vice president Michel Gadbois.


However, despite the CCSA’s apparent enthusiasm about eliminating contraband, health groups question its motives.


“The industry and its front men are cleverly trying to make the public and politicians forget that kids first learned of these flavoured cigarillos because legal manufacturers put them on the market and because retailers displayed them prominently on counter tops for many years,” added Flory Doucas.


Contraband in some convenience stores     


In addition to these questions, 22 convenience stores in and around Montreal are being pursued by Revenu Quebec after a series of police raids uncovered a contraband cigarillo ring on June 16.


There were 17 suspects arrested in the first ever bust involving contraband distribution channels for these types of legal tobacco products, police said, adding that the contraband, imported from Ontario, was being sold at full retail prices in these convenience stores for several years.


Each store likely faces a fine of at least $3,000 along with orders to repay tobacco specific taxes evaded, plus undeclared Quebec sales tax plus penalties, but none of the proprietors were detained.


Of note, the Winnipeg Free Press confirmed that cigarillos were still being sold in convenience stores when they had reportedly visited a handful of shops in July, after the implementation of the ban. Employees confirmed that customers could purchase mini flavoured cigars at their outlets. In each case, the cigarillos were stored out of sight with other non-flavoured tobacco products, but were available upon request.