CANADA. Toronto-based tobacco supplier Rothmans Benson & Hedges has won the licence to produce and distribute the Altadis cigarette brands Gauloises and Gitanes in Canada.
The company formed from the 2000 BAT/Rothmans merger – and now 60% owned by Rothmans and 40% by Phillip Morris – will take over from Van Nelle all the Canadian domestic and duty free distribution for the French brands from 1 April. It will begin production later this year after a transition period. The US side of the Canadian border business is excluded.
Rothmans Benson & Hedges duty free chief Ken Morrison told The Moodie Report: “We have 140 sales reps nationwide and we are putting significant marketing Dollars into this.”
The French cigarette brands are well distributed in Quebec and are sold in Ontario but it is hoped the deal will expand the depth of distribution alongside other brands handled by the group such as Dunhill, B&H, Rothmans, Peter Stuyvesant, Craven A, Belmont and others.
Morrison said the Canadian provinces have recently been taking on increasing responsibility themselves for tobacco regulation although they have been slapped down in a recent test case against Saskatchewan which was ruled to be acting outside its powers under the Federal Tobacco Act. Morrison said he expects the stronger Canadian Dollar to boost sales of Canadian brands in duty free, although sales of international brands overall will be probably be balanced out by the weaker US Dollar.
“Canada is one of the most highly-regulated tobacco markets in the world. The C$15 export tax on Canadian products in duty free continues to be a problem,” he said, adding that the market is poised for more tax increases but not a duty free ban.
“Canadian duty free has been a very soft market but we are optimistic about the potential for Gauloises in particular in Canada,” said Morrison.
