Imperial Tobacco Canada
Imperial Tobacco Canada, manufactures brands duMaurier, Players, and Matinee and claims 57% of the Canadian market. In February 2000, Imperial Tobacco Limited became part of British American Tobacco (BAT). [1]
In December 2004 the Royal Canadian Mounted Police (RCMP) obtained a search warrant against Imperial Tobacco, alleging the company was involved in a cigarette smuggling network in the early 1990s. The RCMP also alleged that Imperial, along with alleged co-conspirators, defrauded the Canadian government out of over $600 million in taxes during that time. Imperial denied the smuggling charges.[2]
A June 3, 1993 letter written by R. Don Brown, Chairman, President and Chief Executive Officer of Imperial Tobacco, Ltd. and sent to Ulrich Georg Volker Herter of BAT, confirmed that Imperial not only knew about the smuggling, but organized and supported it at the highest levels of the company. Brown wrote:
"As you are aware, smuggled cigarettes (due to exorbitant tax levels) represent nearly 30% of total sales in Canada, and the level is growing. Although we agreed to support the Federal government's effort to reduce smuggling by limiting our exports to the U.S.A., our competitors did not. Subsequently, we have decided to remove the limits on our exports to regain our share of Canadian smokers. To do otherwise you place the long-term welfare of our trademarks in the home market at great risk. Until the smuggling issue is resolved, an increasing volume of our domestic sales in Canada will be exported, then smuggled back here for sale." [Italicized emphasis added.]
