The U.S. should learn from Canada’s issue with tobacco

The officials have good intentions. The Black Market is growing rapidly. And smokers are willing to buy less expensive contraband cigarettes. This is the situation today in Canada, and it might become common to the United States very soon.

In several weeks, the United States could ban, after the federal U.S. Food and Drug Administration, and namely its sub-committee handling menthol issue, is scheduled to issue a recommendation regarding potential ban of mentholated cigarettes. Menthol-flavored cigarettes represent nearly 30 percent of the domestic cigarette market. In case the FDA decides to ban them, nearly 30 percent of the U.S. smokers will remain without their favorite flavor.

The menthol flavoring ban would be somehow similar to the situation when Canadian government approved a two-fold increase in cigarette taxes in an attempt to reduce smoking rates. Shortly after the tax hike, Canada was burdened with a problem of tremendous proportions.

In Canada, every third cigarettes is sold on the black market. In Quebec and Ontario provinces, the share of black market went up from 13 percent in 2006 up to 48 percent in 2010. This experience clearly shows that a huge contraband market can grow rapidly when a government implements high taxes or removes a popular product.
The problems for the law enforcement agencies is growing since criminal activities have developed from individuals engaged in occasional contraband to criminal groups distributing illegal goods by means of a nationwide black market chain.

Each week, new evidence of the dangerous black market is found. In December, the RCMP stopped the biggest illicit cigarette shipment ever discovered in the county – 10 million counterfeit cigarettes concealed in a container ship. The vessel, coming from China, transported more than 50,000 cartons, worth almost $5 million. Approximately at the same time, Ottawa police agents confiscated approximately 3 million smuggled cigarettes, drugs and several vehicles that transported the illegal products across Ottawa. Police said that only organized criminal groups have financial resources to carry out such activities.
Unfortunately, such events are common for the country. Illegal tobacco is one of the biggest black market goods across the world. In Canada the black market of tobacco is worth billions of dollars.

Since convenience stores’ profits usually depend on sales of tobacco products, the c’ stores across the country have been hit by sale declines. As legal sales were largely replaced by black market sales, many family business closed their doors, unable to compete with lower prices offered by underground market, which uses street sellers and car trucks to sell smuggled cigarettes.
Another issue debated across Canada nowadays is that whether the government’s tax policy has also destroyed its public health objectives. Traffickers don’t care about the age of their clients, selling their smokes to teenagers. Nearly 30 percent of cigarette butts found in schoolyards, are contraband, according to researches.

Therefore, while the U.S mulls over a menthol ban, they should study Canadian example. In case menthol cigarettes are prohibited in the United States, a black market will surely evolve, with illegal cigarettes flowing to smokers, hitting the legal business hard and the economy very hard. In addition, it would definitely not benefit public health, as anti-smoking advocates hope.

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