The cost of buying a pack of cigarettes is at the centre of a discussion in the Maritimes, where Imperial Tobacco Company (ITC) has receiving end of a lot of brickbats for its new discounting program.

The reaction comes after the Imperial Tobacco implemented a discount program, which was offered to a great number of retailers in Nova Scotia. Thus a lot of cigarettes are sold for 50 cents per package in 621 shops across the Maritimes. Peter Clarck, a store owner in Dartmouth, N.S., stated that he was offered to participate in this program. “You are given the chance to join this program by invitation and there is something that differentiates with fair competition rules that we have in Canada,” he said.

“The give program was created specially to support competitive-oriented pricing, and it depends on shop owners to determine how much of a discount is offered to customers,” stated Eric Gagnon, the representative of for Imperial Tobacco. “Some of them will reap a benefit, which is a discount in the price they pay. Even before this program, the prices on tobacco products were not alike in all stores. It was based on profit that all retailers wanted to gain,” Gagnon stated. He didn’t want to say which criteria was implemented to select shops for the cheaper tobacco products Clarck stated that he can lose his business, because customers will start looking for stores which sell the discounted tobacco products, as for instance the one near his shop. “50% is a big difference, and they will go there or anywhere else in order to buy cheaper tobacco products,” he said.

JTI-Macdonald Corp., one of the Imperial Tobacco’s leading competitors, sent a letter to its retailers stating that Imperial Tobacco’s new program give rise to serious legal issues under the federal Competition Act. “Imperial Tobacco Company is requiring you to lower your margin on its premium brands, stating that it will raise sales in your store. You will lose adult consumers who are looking for cheaper tobacco products unless you significantly lower your own net profit margin in what is the fast-emerging segment,” said the letter.

Clarck declared that what Imperial Tobacco is doing is not how a free market should work. “A company should not have the right to regulate the destiny of retailers. They shouldn’t select people, who can do this and those who can’t,” he said.

Meanwhile, this campaign attracted the attention of the Canadian Cancer Society, which stated that this issue will be examined at the national level. “We will work on this issue in order to make the government prohibit this kind of activities from the tobacco industry,” concluded Nikolas Butler, executive director of the society’s Nova Scotia division.

By Sara Norton, Staff Writer. Copyright © 2010 Cigarette-Store.org. All rights reserved.