Imperial Tobacco Canada Ltd. has disaffirmed starting a price war for smoking products in the Maritimes despite worries by some store owners and other tobacco companies. This reaction comes after the Imperial Tobacco implemented a discount program in November this year. It was proposed to many retailers in Nova Scotia.

As a result particular cigarette brands are sold for as much as 50% less per pack in 621 stores across the Maritimes. Sid Chedrawe, a store owner said he was not informed about this program. “You are given the possibility to participate in this program by an invitation and there is something that seems to differ with fair competition rules that we have in Canada,” he said in an interview.”

Eric Gagnon, a representative for the Imperial Tobacco, declared the program is intended to encourage competitive pricing, and it depends on store owners to decide how much of a discount if proposed to customers. “Some of them will receive the opportunity to buy cigarettes with a reduced price,” Gagnon stated. “Before the program was launched, the prices of tobacco products were not the same as in other tobacco stores. It was mostly based on the difference that the retailers themselves decided to take.”

Gagnon refused to name the reasons which were used to select stores for the discount cigarettes. Chedrawe said that he will loose his business when his clients will start finding those stores that sell cigarettes at a lowered price. “50 cents is a significant difference, and they will go at those stores no matter where they are. It is the same as with gasoline. People will drive a long way to Sackville because they believe they can buy gasoline for a penny cheaper,” he said.

JTI-Macdonald Corp., one of Imperial Tobacco’s biggest rival, stated that Imperial Tobacco’s new program “increases serious legal point under the federal Competition Act.”

Chedrawe declared that what Imperial Tobacco is doing is not how a free cigarette market should act. “A company should not have the power to control the destiny of cigarette retailers. They can’t randomly select people and say, ‘We allow you do this,” he said. “From a retailer’s perspective, the people who are not on this program don’t get cast down because if two retailer across the street from which one has the discount and one doesn’t - thus the one who doesn’t, people may think that retailers as being someone’s who is overcharging.” “The Canadian Cancer Society backs a complete ban on all advertisement actions put forward by the cigarette industry that are planned to raise tobacco sales and of course smoking rate,” stated Maureen Summers, director of the society’s Nova Scotia division.

By Steve Shepherd, Staff Writer. Copyright © 2011 Cigarette-Store.org. All rights reserved.