Going native

>> Smokers head to the reserves for a cheap fix of non-brand name cigarettes

by CHRIS PARÉ

They are the same anonymous tobacco shacks and sparse tin cubes that Montreal smokers flocked to back in 1994, or even as recently as last year, when a carton was going for $43.50.
Eight years ago, a tax increase of this scale was introduced but led to rampant smuggling. Now both federal and provincial governments are ready to fight smoking head-on, except this time, top tobacco manufacturers are not seeing nearly as many duMauriers being moved off the reserves as discount cigarettes-or more specifically, “contraband” smokes, manufactured by First Nation communities in Canada and the U.S.
With a carton of cigarettes today going for $53.98, it would be hard not to at least consider switching over to a non-brand name smoke that only costs $18 a carton ($15 if you forego the packaging and opt to take them home in a plastic bag). This price disparity is what has tobacco manufacturers contemplating the once ironclad brand loyalty of their customers.

“We’ve been going since the spring, and now it’s getting to the point where our friends are asking us to pick up for them,” says Genevieve, who now lines up with her husband, along with everyone else that made the run over to the reserve after work. “A pack of Natives are only two bucks.”

Industry goliath Imperial Tobacco may be rightfully suspicious. Statistics Canada research shows that cigarette sales in Canada fell 5.2 per cent in the first quarter of this year compared with 2001. This trend was buoyed by the announcement of yet another tax hike on June 17, when the provincial Finance Ministry announced the increase in cost of 6.55 cents per cigarette to 9.05 cents (or an additional $9.09 per carton). The ensuing reaction it spawned, however, has Imperial feeling a little indignant.

“[Is it a concern] that we’re losing customers? Absolutely,” says Imperial Tobacco spokesperson Christina Dona. “It’s really the smokers who choose to try a lower-costing brand and smoke something different. That means that they’re switching from a brand name to a non-brand name, which means that we’re losing our customers, which is definitely a concern to us.”

Getting around the law

These lower-costing brands manage to avoid the excise duty being paid by manufacturers like Imperial, affecting not only them but also the off-reserve retailers and Canadian tobacco growers who depend on the industry.

For the RCMP, it doesn’t matter where the cigarettes are manufactured-if the excise duty isn’t paid, it’s illegal. “If the product, no matter what the brand, is not bearing the proper warnings from Revenue Canada stating that duty has been paid, no matter what the product is, the product is illegal on the market,” says RCMP Staff Sergeant Brian Burn. “Being found in possession of the product becomes a criminal offence under the excise act.”

Discount cigarettes such as Native brand are produced on the Mohawk reserve of Akwesasne, also known as Saint-Regis, which straddles the borders of Quebec, Ontario and New York. Therefore, because the reserve straddles several borders, they are not in the same import-export situation as other manufacturers. Also, their First Nation status grants them tax-free status. The cigarettes remain, however, in violation of Health Canada standards on tobacco products.

And what is the Mohawk community’s position on the rising popularity of First Nation-manufactured cigarettes in the wake of a recent tax hike? For Timmy Norton, public relations officer for the Mohawk Council of Kahnawake, it simply does not exist.

“I would say at this point that there is no official position,” says Norton. “It’s done in the community, and there is no enforcement within the community by our police force.”

On the reserve, trying to get a retailer’s take on the switch to cheap contraband smokes was tantamount to being spotted as a narc. Upon entering the first hut, the words “journalist” and “cigarettes” were promptly met with a thumb pointed at the door and the menacing holler of “out.”
The next few merchants were slightly less hostile, and even went so far as to confirm the recent surge in popularity of the Native brand over the usual stalwarts. And though the Non-Smokers’ Rights Association of Ontario shows the switch to discounted tobacco products to be accountable for only 10 per cent of the recent decline in cigarette sales, it is still salt in the wound. Dona appeared to be taking it in stride.

“What can you do? It’s an industry in decline.” :