Illegal tobacco trade hurting producers: MPP POLITICIANS, GROWERS CALL FOR ACTION

Canadian politicians and tobacco producers are clamouring for action on the illegal tobacco trade after a U. S. grand jury in the state of Washington indicted two founding partners of a Six Nations cigarette maker accused of taking part in a conspiracy to supply contraband cigarettes.

Haldimand-Norfolk MPP Toby Barrett said in weekend interview that he couldn’t speak to the specifics of the case, but he was quick to say enforcement eff orts north of the border have been woefully insufficient in countering cross-border contraband activities.

“In Canada and, particularly, Ontario, we are not seeing adequate enforcement with respect to the illegal trade of tobacco products, and both the federal and provincial governments need to do more,” Barrett said.

“This trade eliminated most of our Ontario tobacco growers who cannot compete while producing a legitimate product. We’ve seen the blatant establishment of smoke shacks, particularly on Highway 6 and Highway 54, and not enough is being done to stop it.”

Meanwhile, Ottawa and the provinces collectively lost $2.5 billion in tax revenue in 2008, he said, and more than 50 per cent of cigarettes on the street are contraband.

“It will only get worse if we don’t tackle it.”

Ken Hill of Ohsweken and Peter Montour of Hamilton -two members of a group of businessmen who co-founded Grand River Enterprises -have been charged with 15 counts of trafficking in contraband cigarettes and one count of conspiracy to traffic in contraband cigarettes.

In the indictment, the U. S. grand jury alleges that Hill and Montour were part of a conspiracy to supply millions of illegal cigarettes over a five-year period to a smoke shop just north of Seattle.

A U. S. company called Native Wholesale Supply and its owner, Art Montour Jr., also have been charged.

Art Montour is a former band councillor on the Seneca reserve south of Buffalo, but is not related to Peter Montour.

If convicted, all three could face a maximum penalty of five years in prison on each count, and possible fines.

They have been business partners for several years.

According to the grand jury’s 27-page indictment, the three carried on a business arrangement while engaging in the alleged illegal trade of two brands of cigarettes, Seneca and Opal, for which Peter Montour has been a sales representative for Native Wholesale Supply, while simultaneously serving as Grand River Enterprise’s sales manager.

Meanwhile, Hill was serving as GRE’s chief marketing officer. Hill was unavailable for comment at press time.

The indictment states that they conspired to sell the brands to a smoke shop called the Blue Stilly in the state of Washington from March 2003 to February 2008 without paying the required cigarette tax owed for each pack. It also says the Blue Stilly was advised to order the cigarettes from a company located in the state of New Mexico, but the cigarettes were actually shipped from a warehouse in Las Vegas to the smoke shop without the proper Washington state tax stamp and no taxes were paid.

The indictment states that Hill and Montour received a share of profits from Native Wholesale Supply. The Ontario Flue-Cured Tobacco Growers’ Marketing Board wants Ottawa and the provinces to ramp up action against the contraband trade in Canada. “From the broad perspective a lot more can be done,” said tobacco board chairman Fred Neukamm.

“A lot of people are taking an interest but there is not enough at this point. Illegal cigarettes have had a very detrimental eff ect on our members who produce and sell legally.” Barrett advocates a three-pronged attack using more enforcement, education and tax reform to lower the prices of cigarettes that are fuelling the contraband trade.

“There’s no silver bullet,” he said. “We have to look at several different types of measures and it’s going to take time.”

The problem is so pervasive, he said, that enforcement authorities have identified more than 100 organized groups involved in the illegal trade.

“Education on what is wrong with buying illegal cigarettes is also needed because people don’t see anything wrong with it. They’re just looking at the lower price and a chance to save a lot of money. “Also, nobody is asking for proof of age. These activities have neutered Ontario’s world renowned tobacco control policies.”


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