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Imperial Tobacco Canada responds to the Speech from the Throne 

MONTREAL, Nov. 24 /CNW Telbec/ - Imperial Tobacco Canada is pleased to see that the Harper government has committed to crack down on organized crime and the smuggling of firearms as mentioned in last Wednesday's Speech from the Throne. "We agree with the government when it says that serious offences should be met with serious penalties," said Benjamin Kemball, President and CEO of Imperial Tobacco Canada.

The illegal sale of tobacco has become an epidemic in Canada where, according to a recent study, 32.7% of all cigarettes purchased in Canada are illegal. This number rises to an alarming 48% of cigarettes purchased in Ontario and 40% in Quebec.

In an April 2008 news release, the former Minister of Public Safety, Stockwell Day, stated: "Tobacco trafficking and organized crime often go hand in hand, resulting in other dangerous crimes, such as gun violence and drug smuggling".

"The government is on the right track by making organized crime and smuggling a priority, but limiting concerns about smuggling to that of guns is too narrow a focus; and just the tip of the iceberg. With the smuggling of guns also comes smuggling of other products such as drugs and illegal tobacco and I hope that this government can see its way to broadening its focus to all these illegal products" said Mr. Kemball.

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Imperial Tobacco Canada responds to Prime Minister Harper 

In response to the Prime Minister's call to crack down on the sale of cigarillos and flavoured cigarettes to reduce their attractiveness to youth, Imperial Tobacco Canada would like to ask the Right Honourable Stephen Harper to include in this crack down the rampant illegal tobacco market that currently plagues Canada, targets Canada's youth and undermines all of Canada's tobacco control policies.

These findings seem to validate some of Health Canada's conclusions from the recent Canadian Tobacco Use Monitoring Survey, in particular the stabilization of tobacco incidence among minors and, indeed the general population, after many years of decline. Inaction on illegal tobacco sales gives minors unrestricted access to cigarettes at pocket money prices.

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Tobacco foundation cutting back on its arts funding 

The world's economic woes have penetrated the tobacco industry, causing the Imperial Tobacco Canada Foundation to announce yesterday that it will cut its arts giving to $575,000 next year from $1.7-million this year.

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Canadians recognize that illegal tobacco sales are a problem for the country and look to governments for answers 

A recent study commissioned by Imperial Tobacco Canada found that the vast majority of Canadians think the illegal tobacco trade is a problem in Canada that the federal government and the Royal Canadian Mounted Police should address.

"The results of this public opinion poll clearly show that the government must take this problem seriously and propose practical solutions to counter it. The problem is growing out of control," said Benjamin Kemball, President and CEO of Imperial Tobacco Canada. "We are disappointed that this major issue is not included in any party's current electoral platform."

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Imperial Tobacco Canada reacts to the Conservative Party's proposed political platform 

Imperial Tobacco Canada is surprised that Stephen Harper failed to include the issue of illegal tobacco as one of his priorities when he revealed the Conservative's political platform earlier this week.

Not only is the Canadian Government losing over $2 billion dollars in tax revenues, which is especially relevant in these troubled economic times, but this growing problem continues to have extreme, negative, social impacts.

"Failure for government to prioritize the issue of illegal tobacco sales is driving a highly regulated, heavily taxed, tobacco market to an illegal, unregulated and untaxed free-for-all" said Mr. Benjamin Kemball, President and CEO of Imperial Tobacco Canada.

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Philip Morris extends bid for Rothmans after acquiring 67.8 per cent of shares 

U.S. tobacco giant Philip Morris International Inc. (NYSE:PM) has extended its privatization bid for Rothmans Inc. (TSX:ROC) to Sept. 29 after acquiring just over two thirds of the Canadian company.

Philip Morris said Wednesday it had acquired 47 million shares of Rothmans or 67.8 per cent of Canada's second-biggest cigarette maker under its $30 a share bid.

John Barnett, president and CEO of Rothmans, said the takeover will help the Toronto company grow.

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Offer by Philip Morris International Inc. (PMI) for Rothmans Inc. successful; PMI extends offer 

Rothmans Inc. announced today that approximately 47,004,961 common shares representing approximately 67.8% of the outstanding common shares of Rothmans Inc. (on a fully-diluted basis) have been tendered to the offer made by PMI.

PMI has taken up all of the common shares which were tendered and will pay for such shares on September 19, 2008. Shareholders of Rothmans Inc. who tendered common shares to the offer will receive C$30.00 cash per share.

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• Smuggling fine was a bargain 

A former executive with the holding company that once owned Imperial Tobacco says the agreement reached in July to settle federal and provincial claims on smuggling was little more than "chump change" compared with what the company earned during the smuggling era in the late 1980s and early 1990s.

Paul Finlayson, who for 16 years was an executive at Imasco, which once owned Imperial, said the government basically caved in to tobacco interests when it made what he claimed was a token settlement with Imperial and Rothmans Inc.

Finlayson said Imperial earned $600 million to $700 million a year during the smuggling era when the company "lubricated" a system that defrauded Canadian governments of billions of dollars in unpaid taxes. . . .

Now retired, he said in an interview that the $600-million settlement with Imperial represented a small fraction of the profits Imperial earned during that period and an even smaller fraction of the taxes and duties governments lost to smuggling.

The Canada Revenue Agency refused to comment on Finlayson's statements. . . .

Finlayson, who managed operational systems at Imasco, said he prepared the operational plans for sending Imperial cigarettes tax-free into the United States, where they were later sold to smugglers who brought them back into Canada through the Akwesasne Six Nations reserve near Cornwall, Ont. . . .

"The RCMP knows all about this. They could have walked in and just handcuffed everybody at Imperial," he said, adding that the government did "not have the guts of a field mouse to go after the executives of the company." He admitted that this group could have included him.

He said he was speaking out because he believes Imperial crossed the line. "The envelope was being pushed a little bit beyond what I could tolerate it being pushed." He said he left Imasco during this period.

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The RCMP knows all about this. They could have walked in and just handcuffed everybody at Imperial . . . . [The Canadian government didn't] have the guts of a field mouse to go after the executives. . . . [T]hey had Imperial cold, on the ground screaming. (But) they reached down and gave it a hand and pulled them up and said, 'Ah, give us 50 million bucks and we'll forgive and forget.'
Paul Finlayson, who for 16 years was an executive at Imasco, which once owned Imperial Tobacco Canada. Finlayson said he developed the company's 1994 smuggling/tax evasion model.

Imperial Tobacco Canada, federal government and provinces reach resolution on contraband tobacco investigation 

Today in Montreal, the Company entered a plea of guilty to a regulatory violation of a single count of section 240 (1) (a) of the Excise Act and has paid a fine. The Company has also entered into a 15-year civil agreement (the Comprehensive Agreement) with the federal and provincial governments.

"We are pleased to have resolved this issue," said Benjamin Kemball, president and CEO of Imperial Tobacco Canada. "Today's events give our business the stability it needs to move forward to address, with clarity and focus, the issues, opportunities and challenges it faces today and will face in the future."

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WASHBURN: Lack of ethics in business harms companies, individuals  

When the $1.15-billion fine against Imperial Tobacco and Rothmans' Benson & Hedges was announced last week, it was a paltry sum compared to the companies' actions. . . .

Socrates said, "Vice harms the doer." Even if no one ever finds out and we can get away with doing something wrong, the act hurts us more than it hurts the victims.

But in a cynical world, Socrates appears to be talking into the wind. No one pays attention to this kind of thinking any more. Since Gordon Gekko announced in the filmWall Street,"Greed is good. Greed works," a generation of MBA students has felt it had a license to do whatever it takes to make money.

And, this is the heart of the problem. When people lose trust in business, business loses even more. Business loses when we think every time a corporation sends out a press release, it is full of lies. . . .

Businesses need to take this issue of trust more seriously. It is true; one bad apple spoils the barrel. Not only does it undermine the fundamental economics of the 21st century, but it also deepens the pervasive cynicism, which is a trademark of our times. This distrust spreads like a cancer through all aspects of our lives.

If there is a way out, it will not be legislated. Morals cannot be successfully turned into laws. It is only the actions of individuals of conscience that will make this change possible. It is going to take a massive change of heart. Sadly, it is hard to see how that will happen.

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LETTER: SHATENSTEIN: Cough, cough 

Funny as your Aug. 2 editorial cartoon was - likening tobacco executives to sewer rats - it truly is an example of art imitating life. Just a day earlier, after the $1.15-billion fine was imposed on Canada's two leading cigarette manufacturers, Imperial Tobacco spokeswoman Catherine Doyle told CTV, "We realize ... we're going to take a hit to our reputation because of this."

She should be fined another billion dollars by the irony police for that statement. When your industry pushes products that lead 45,000 Canadians to an early grave every year (according to Health Canada), what reputation do you have for anyone to hit?

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Big tobacco to pay record fines after guilty plea 

Two of Canada's biggest tobacco companies will pay record-setting fines after pleading guilty to tax charges laid in connection with contraband cigarettes.

Imperial Tobacco Canada Limited and Rothmans Benson and Hedges pleaded guilty to "aiding persons to sell and be in possession of tobacco manufactured in Canada that was not packed and was not stamped in conformity with the Excise Act."

Imperial Tobacco will pay $200 million in fines and Benson and Hedges was fined $100 million.

"Based on our estimates, by (the companies) paying these fines, they will not be making any profits out of the (illicit) activities they had in the past," Revenue Minister Gordon O'Connor said at a press conference held in Ottawa on Thursday.

The companies have also committed to help combat contraband tobacco activities in Canada.

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Canadian Companies Settle Cigarette Smuggling Case 

Two Canadian tobacco companies agreed to pay criminal fines and civil penalties totaling about 1.15 billion Canadian dollars after admitting Thursday that they had aided cigarette smugglers.

An eight-year investigation of Imperial Tobacco Canada and Rothmans, Benson & Hedges by the Royal Canadian Mounted Police covered events beginning in the late 1980s. At that time, high Canadian taxes intended to discourage smoking prompted a wave of cigarette smuggling from the United States that continued for several years.

Under the settlement reached with the federal government and all of Canada's provinces, the companies acknowledged in a guilty plea on Thursday that they had known that cigarettes sold to wholesalers in the United States were swiftly returned to Canada for sale on the black market. . . .

Much of the cigarette smuggling took place through a Mohawk Indian reservation that spans the international border along the St. Lawrence River near Massena, N.Y.

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Imperial, Rothmans Agree to Pay C$1.15 Billion Over Smuggling  

Imperial Tobacco Canada Ltd. and Rothmans Inc., Canada's two biggest tobacco companies, agreed to pay about C$1.15 billion ($1.12 billion) in fines and penalties to settle charges they aided cigarette smuggling in the 1990s.

Imperial, the Canadian unit of the U.K.'s British American Tobacco Plc, was fined C$200 million after admitting it helped people sell untaxed cigarettes, the Royal Canadian Mounted Police said. Toronto-based Rothmans, which makes Benson & Hedges, also pleaded guilty and was fined C$100 million.

``These are the largest fines ever levied in Canada,'' Mike Cabana, the RCMP's assistant commissioner, said at a news conference in Ottawa. ``The message sent today is that no company is above the law.''

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Big tobacco to pay $1.15 billion over contraband product 

Two of Canada's biggest tobacco companies will pay $1.15 billion in criminal and civil penalties after pleading guilty to customs charges related to contraband cigarettes and smuggling.

Under separate court settlements in Montreal and Toronto on Thursday, Imperial Tobacco Canada Limited was fined $200 million and Rothmans Benson & Hedges (TSX:ROC) $100 million as part of the criminal charges.

The companies will pay another $815 million in civil damages to the federal and provincial governments over the next 15 years.

In total, Ottawa will receive $575 million, with the provinces getting the rest of the $1.15 billion.

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