Black market luring patrons, group says
By Doug Schmidt, The Windsor Star
WINDSOR, Ont. — Tobacco consumption may kill people, but Windsor’s corner store operators complain that the plentiful supply of cheap, contraband smokes on local streets is killing their business.
“It’s a huge issue — I’m sure half the cigarettes sold in Windsor are illegal,” said Terry Yaldo, who owns the Midway Convenience corner store on Wyandotte Street East in Pillette Village.
Yaldo said his sales of tobacco products aren’t a big revenue maker, but they’re an important generator of customer traffic, with smokers purchasing other things that provide a much-needed extra margin of profitability.
Wa’il Alfaris, owner of Haf-Price Variety on Drouillard Road, can always tell when the police or other government authorities have scored another big bust — that’s when his store traffic and cigarette sales jump.
“You see a huge difference — people come in and ask, ‘What is the cheapest brand you have?’” said Alfaris, adding those smokers will return until the next illicit shipment arrives in town.
There’s been a lot of that extra store traffic lately.
In four major street busts over the past three months, the RCMP in Windsor seized 1,296 cartons and 1,182 “baggies” of unwrapped cigarettes — more than 260,000 smokes. That was more than triple the number of cartons (each containing 20 packages) and quadruple the number of baggies (each containing 200 individual cigarettes) seized in all of 2011.
There’s been an “alarming trend” upward in the number of contraband cigarettes being sold in Windsor, said Dave Bryans, CEO of the Ontario Convenience Stores Association.
He cites studies that point to contraband making up a third or more of all cigarettes smoked in Ontario, with Ontario’s auditor general suggesting up to a billion dollars in annual tobacco sales tax revenues is being lost to the province.
Bryans said the contraband smokes are being sold in parking lots, on factory floors and in retirement homes.
The convenience store operators themselves are being approached to sell the black market cigarettes.
Over the last three years, he said Ontario has seen an average of five convenience stores close every two days. With fierce competition within that sector, and the big price differentials between legitimate and illegal, it’s “almost forcing them to participate,” said Bryans.
“Many are hanging on by a thread,” he said, adding the sellers of contraband and counterfeit are adding up to a growing number of regular customers being taken away.
With a legitimate carton of smokes at the store costing up to $80 compared to a carton of contraband offered out of someone’s car trunk for less than $30, Bryans asks: “What would you buy as a smoker?”
One customer exiting Yaldo’s store on Wednesday said she’s tried the counterfeits but prefers the expensive legal variety stacked discreetly behind the counter at Midway. Melanie, who wouldn’t give her last name, spent close to $10 on a small pack of cigarettes and a loaf of bread.
“I know there’s a lot of crap in my cigarettes, but you don’t know what additional crap is in (the contraband),” she said, adding her friends who do purchase the illegal variety are always discovering stems and other unwanted contents.
The culprits being nabbed in Windsor tend to be getting their product from Ontario’s native reserves, and “they’re destined for convenience stores,” said Cpl. Annette Bernardon, a spokeswoman for Windsor RCMP. Yaldo and Alfaris said they’ve been approached to sell the contraband, and Yaldo said he gets “many customers coming in, asking do we have Indian cigarettes?”
Bernardon said she agrees with Bryans: “Yes, there’s been a sharp increase in the amount of seizures.”
While “opposed to the sale of all tobacco,” Medical Officer of Health Dr. Allen Heimann said he’s concerned the availability of cheap counterfeit and contraband cigarettes could be finding a ready market among young people.
“It negates the point of raising cigarette taxes to decrease the attractiveness of smoking,” he said. The market is certainly there — Heimann said Windsor and Essex County boast a higher percentage of smokers (22 per cent of the population) than the provincial average (19 per cent).
Bryans meets next Wednesday with city council’s public safety committee to urge politicians to lobby senior levels of government to put more resources into fighting the trade in contraband.
In February, the City of Ottawa voted to do just that. Council there also approved tough new policies that see an end, starting July 2, to smoking on restaurant outdoor patios, at playgrounds and beaches, as well as outside arenas and at festivals and events held on city property.
Ontario’s Ministry of Finance has an investigations section that enforces the Tobacco Tax Act, and the RCMP pursue violations of the Excise Act.
“We really don’t get involved in that,” Windsor police spokesman Sgt. Brett Corey said of the hunt for contraband cigarettes.
Bryans and his organization wants that to change, and Ward 6 Coun. Jo-Anne Gignac, who sits on both the local police and health boards, also favours municipal police getting behind that effort.
“When you’re looking at the demographic of teens, when they have access to cigarettes — boom! — they become addicted,” said Gignac. She cautions that her support for local police getting involved in the war on contraband smokes is contingent on senior government sharing in the proceeds of recovered lost taxes.
