New Federal Government Regulations on Plain Packaging for Tobacco Will Hurt Small Businesses

OKBA calls for commitments by political parties to fight contraband trafficking of tobacco products leading into fall election

ETOBICOKE, ON, May 7, 2019 /CNW/ - Following Health Minister Ginette Petitpas Taylor's announcement last week on new tobacco regulations, our members are disappointed and dismayed that none of the suggestions by industry stakeholder groups, including the Ontario Korean Businessmen's Association (OKBA), were considered in the federal government's decision to mandate plain packaging for legal tobacco products sold in Canada.

OKBA members know firsthand that increasingly strict tobacco regulations are not enforced equally in this country. When the government increases taxes and applies more onerous regulations to legal products, contraband tobacco traffickers continue to benefit by selling cigarettes in packages that ignore government regulations and are sold to consumers tax-free. Since 2009, the OKBA has lost more than 1000 members, with the vast majority of those business closings resulting from illegal competition from the black market that controls contraband tobacco.

These newly announced regulations mean that it will become increasingly difficult to differentiate legal from illegal tobacco products. Illegal tobacco manufacturers, who have routinely avoided past government regulations addressing packaging and labelling, will now have an easier time flooding the market with products that mimic legal brands.

The government has highlighted two key objectives underlying this legislation: (1) Protecting "young persons and others from inducements to use tobacco products and the consequent dependence on them," and (2) Preventing "the public from being deceived or misled with respect to the health hazards of using tobacco products."

"The only way the government can guarantee this will occur is if the law is applied equally to all products being sold and purchased in Canada, including the up to 40% of illegal tobacco consumed in Ontario today. To date, this government has shown no willingness to crack down on illegal manufacturers," stated OKBA spokesperson Kenny Shim.

"The booming black market of illegal, unregulated, and untaxed products not only leads to a loss in market share for our members – it also leads to a loss of hundreds of millions of dollars in government revenue, contributes to the funding of organized crime, and further compromises Canadian public health by introducing unregulated products to the market," Shim added.

As responsible retailers, the OKBA has always complied with Canadian regulations and this will not change. However, our members are extremely frustrated to see the government continue to ignore massive illegal enterprises that are growing every year and threatening the livelihood of hardworking, law-abiding small business owners. It is the industry's hope that political leaders from all parties will commit to tackling this scourge before more law-abiding business owners are forced out of business.

SOURCE Ontario Korean Businessmen's Association

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