TobaccoReporter logo

Tag: Canada

  • $3.2M of Contraband Tobacco Seized in Canadian Traffic Stop

    $3.2M of Contraband Tobacco Seized in Canadian Traffic Stop

    A traffic complaint in Ontario, Canada, allowed police to uncover a massive shipment of contraband tobacco valued at C$4.4 million ($3.2 million). Police stopped the truck after a concerned motorist reported it for speeding. Provincial police, along with Ministry of Transportation staff, discovered 17,820 kilograms of untaxed fine-cut tobacco during the inspection.

    Authorities say the illicit shipment would have cost the government an estimated C$9.1 million ($6.6 million) in lost taxes. A 60-year-old man from Puslinch, Canada, has been charged with trafficking contraband tobacco.

  • Canadian Tobacco Settlement a Step Closer to Complete

    Canadian Tobacco Settlement a Step Closer to Complete

    After years of mediation to resolve long-pending tobacco product-related litigation in Canada, the court-appointed Mediator’s and Monitor’s Plan of Compromise and Arrangement was today (March 7) sanctioned by the Ontario Superior Court of Justice in the ongoing proceedings under the Companies’ Creditors Arrangement Act (CCAA). The sanctioning was a significant step in finalizing the $22.7 billion settlement agreement with Imperial Tobacco Canada (a BAT subsidiary), JTI-Macdonald Corp., and Rothmans, Benson & Hedges (a PMI subsidiary). The settlement has been in negotiations since March 2019.

    Following a judicial hearing on the proposed plan, the three companies reached a consensual resolution of all outstanding objections to it. The plan will resolve all Canadian tobacco litigation and provide a full and comprehensive release to the companies.

    “We are pleased that the Court has sanctioned the Mediator’s and Monitor’s Plan of Compromise and Arrangement, a critical milestone in the CCAA process, Imperial Tobacco Canada wrote in a statement. “We look forward to the successful implementation of this plan, which maximizes value for claimants, resolves outstanding tobacco litigation, and allows us to emerge from CCAA protection. While there are still some steps that must be taken to implement the settlement, Imperial Tobacco Canada is committed to continue working with the relevant parties to complete this process as quickly as possible for the benefit of all stakeholders.”

  • JTI and Others Close to Concluding Canadian Lawsuit

    JTI and Others Close to Concluding Canadian Lawsuit

    JTI-Macdonald Corp. (JTI-MC) announced that last week it, along with co-defendants Imperial Tobacco Canada (ITC), and Rothmans, Benson & Hedges (RBH), filed materials with the Ontario Superior Court of Justice in joint support of plans to settle all pending tobacco-related claims in Canada, subject to proposed amendments being approved by the court.  

    The filings stem from a 2019 class-action lawsuit, where in October 2024 the court-appointed mediator proposed the three companies pay a total of 32.5 billion Canadian dollars to settle all litigation. In January, JTI-MC reached an agreement with the other co-defendants on the terms of allocation of payments that were then filed with the Ontario Superior Court Feb. 27, which now awaits court approval.

    As a result, JTI-MC intends to record a provision for litigation losses related to the payment of the settlement amount as an operating expense in fiscal year 2024, for an adjusting subsequent event.

  • Ferio Tego Available in Canada

    Ferio Tego Available in Canada

    Ferio Tego announced that its products will now be available in Canada, partnering with Kretek International Canada for distribution.    

    “We have enjoyed working closely with the outstanding team at Kretek Canada,” said Brendon Scott, co-owner of Ferio Tego. “Canada has a robust premium cigar market with tremendous retailers and passionate consumers, and we’re excited to offer our brands in this market.”

    The initial launch will feature its Elegancia, Summa, Timeless Sterling, and Timeless Prestige lines, all manufactured in the Dominican Republic. Additional company offerings from Nicaragua and Honduras will be available later in 2025.

    “The complexity, style, and origins of our blends make them quite distinctive,” said Michael Herklots, co-owner of Ferio Tego. “Our neighbors in the north have sought out our blends over the years, so we’re pleased to finally deliver them to their local tobacconists with the help of Kretek Canada.”   

    This is the third international expansion for the company over the last two years following successful releases in Asia and the United Arab Emirates.

  • BAT Shares Tumble 9%

    BAT Shares Tumble 9%

    Today, British American Tobacco shares dropped 9% in London on news it would take a $7.74 billion hit from a Canadian lawsuit as well as fears that changes in Bangladesh and Australia would hurt its performance in 2025. The $6 billion loss off its market capitalization was the company’s worst day on the market since 2020. BAT’s stock remains up 7% since the start of the year.

    Under the proposed Canadian settlement, an upfront payment will be followed by annual payments, initially worth 85% of net income after taxes, excluding income related to alternative products like vapes, and reducing over time. BAT and other tobacco companies were set to pay $22.8 billion to settle a long-running case in Canada, but some parties, including Philip Morris International’s Canadian affiliate, have since objected to the proposal.

    Meanwhile, BAT said new tobacco regulations in Australia and increased excise and VAT in Bangladesh would hurt its tobacco business.

    Chief Executive Officer Tadeu Marroco said these represented “significant regulatory and fiscal headwinds” that would dent its performance this year, but their impact would recede into 2026 when BAT’s investments would also pay off to spur growth. For 2025, the company expects just 1% revenue growth.

    Marroco also said he was hopeful U.S. President Donald Trump’s new administration could tackle sales of illegal disposable vapes, which have impacted its cigarette and vape sales in the country. “We remain committed to returning to our mid-term guidance of 3% to 5% revenue and 4% to 6% adjusted profit from operations growth on a constant currency in 2026,” he said.

  • Creditors Approve Canadian Litigation Deal

    Creditors Approve Canadian Litigation Deal

    Creditors have approved a proposed litigation settlement that would require three leading tobacco companies to pay billions to Canada’s provinces and territories, reports CBC.

    The proposed CAD32.5-billion deal between JTI-Macdonald Corp., Rothmans, Benson & Hedges and Imperial Tobacco Canada and their creditors was announced in October after more than five years of negotiations.

    Representatives for the creditors, which include provincial governments seeking to recover smoking-related health-care costs as well as plaintiffs in two Quebec class-action lawsuits, voted on the plan in a virtual meeting Dec. 12.

    The proposed settlement includes $24 billion for provinces and territories, $4 billion for tens of thousands of Quebec smokers and their heirs, and more than $2.5 billion for smokers in other provinces and territories. It also includes more than $1 billion for a foundation to help those affected by tobacco-related diseases.

    If approved in court, the proposed deal would end more than a decade of litigation.

    In 2015, a Quebec court ordered the three companies to pay about $15 billion in two class-action lawsuits involving smokers in the province who took up the habit between 1950 and 1998 and either fell ill or were addicted, or their heirs.

    Four years later, the landmark ruling was upheld by the province’s Appeal Court. The companies then sought creditor protection in Ontario in order to negotiate a global settlement with their creditors.

    All of the legal proceedings against them were put on hold during the talks. That order has now been extended until Jan. 31, 2025.

    The court is scheduled to review the proposed settlement toward the end of January.

  • Canada’s Tobacco Deal not ‘Doomed’: Judge

    Canada’s Tobacco Deal not ‘Doomed’: Judge

    An Ontario judge says any outstanding issues regarding a proposed $32.5 billion settlement between three major tobacco companies and their creditors should be solvable in the coming months. Ontario Superior Court Chief Justice Geoffrey Morawetz released his reasons for approving a motion last week to have creditors’ representatives review and vote on the proposal in December.

    One of the companies, JTI-Macdonald Corp., said last week it objects to the plan in its current form and asked the court to postpone scheduling the vote until several issues were resolved. The other two companies, Rothmans, Benson & Hedges and Imperial Tobacco Canada Ltd., didn’t oppose the motion but said they retained the right to contest the proposed plan.

    The proposal announced last month includes $24 billion for provinces and territories seeking to recover smoking-related healthcare costs and about $6 billion for smokers across Canada and their loved ones.

    If a majority of creditors accept the proposed deal, it will move on to the next step: a hearing to obtain the court’s approval, tentatively scheduled for early next year. In a written decision released Monday, Morawetz said it was clear that not all issues had been resolved at this stage of the proceedings.

    He pointed to “outstanding issues” between the companies regarding their respective shares of the total payout and debate over the creditor status of one of JTI-Macdonald’s affiliate companies. In order to have creditors vote on a proposal, the court must be satisfied the plan isn’t “doomed to fail” either at the creditors or court approval stages, court heard last week, media reports.

    Lawyers representing plaintiffs in two Quebec class actions, those representing smokers in the rest of Canada, and 10 out of 13 provinces and territories have expressed their support for the proposal, the judge wrote in his ruling. While JTI-Macdonald said its concerns have not been addressed, the company’s lawyer “acknowledged that the issues were solvable,” Morawetz wrote.

    “At this stage, I am unable to conclude that the plans are doomed to fail,” he said. “There are a number of outstanding issues as between the parties, but there are no issues that, in my view, cannot be solved.”

    The proposed settlement is the culmination of more than five years of negotiations in what Morawetz has called one of “the most complex insolvency proceedings in Canadian history.”

  • Illicit Market Thriving After Flavor Ban: ITCAN

    Illicit Market Thriving After Flavor Ban: ITCAN

    Image: Ahmed

    One year after Quebec banned non-tobacco flavored vapes, most vapers are buying such products illegally in the province, according to Imperial Tobacco Canada (ITCAN).

    In a survey carried out by Leger, 61 percent of vapers said that they purchased non-tobacco flavored vapor products in the past 12 months. Forty percent of those respondents said that they purchased an illegal flavored vapor product from a vape shop, and 33 percent of those respondents said they purchased flavored vapor products online. Forty-seven percent of those respondents said they knew it was illegal when they purchased a flavored vapor product

    “If the government’s objective was to create an untaxed and unregulated vapor market, then well done and mission accomplished,” said ITCAN Vice President of Corporate and Regulatory Affairs Eric Gagnon in a statement.

    ITCAN attributed the problem in part to weak enforcement. “A report from the Ministère de la Santé et des Services Sociaux (MSSS) website reveals that only 150 (38 percent of all vape shops) have been inspected by MSSS,” the company wrote. “Worse yet, very few fines have been issued with reports showing only 28 of those 150 received fines, even though more than 90 percent are uncompliant.”

    ITCAN urged the government to train inspectors, issue fines heavy enough to deter illegal players and conduct an “enforcement blitz” to demonstrate the gravity of the situation, among other suggestions.  

  • JTI Opposes Canada Settlement

    JTI Opposes Canada Settlement

    Image: helgidinson

    JTI-Macdonald Corp. opposes a proposed multi-billion-dollar settlement of long-running tobacco litigation announced earlier this month, reports Financial Post, citing a company filing made to an Ontario court.

    As part of a court-appointed mediator’s plan, Canada’s three leading cigarette manufacturers would pay CAD32.5 billion ($23.6 billion) to provinces and territories and more than CAD4 billion to tens of thousands of Quebec smokers and their heirs.

    Before it can be implemented, the proposed plan must be voted on by creditors, which include plaintiffs in two class-action lawsuits in Quebec as well as provincial governments seeking to recover smoking-related health costs. It must also be approved by the court.

    In its court filing, JTI-Macdonald Corp. indicated it does not support the proposal due to “critical outstanding issues.”

  • Tobacco Industry Nears Settlement of Litigation

    Tobacco Industry Nears Settlement of Litigation

    Image: ink drop

    Canada’s three leading cigarette manufacturers will pay CAD32.5 billion ($23.6 billion) to settle a long-running lawsuit as part of a court-appointed mediator’s proposed plan, Philip Morris International announced on Oct. 18.

    In 2015, a Quebec court award damages to some 100,000 smokers and ex-smokers who alleged the companies failed to warn consumers about the health risks of smoking, which they had known about since the 1950s.

    The verdict was upheld in 2019, forcing the Canadian subsidiaries of PMI, BAT and Japan Tobacco International to seek bankruptcy protection.

    The subsidiaries have been under a court-supervised mediation process negotiating a possible settlement since then.

    The allocation of the aggregate settlement amount between the tobacco giants remains unresolved, according to Philip Morris.

    “Although important issues with the plan remain to be resolved, we are hopeful that this legal process will soon conclude, allowing RBH [Rothmans, Benson & Hedges] and its stakeholders to focus on the future,” said PMI CEO Jacek Olczak.

    “Today marks an important step towards a potential settlement,” said Eric Gagnon, vice president, corporate and regulatory affairs for BAT’s Imperial Tobacco Canada subsidiary in a statement. “The plan resolves all Canadian tobacco litigation and provides a full and comprehensive release to Imperial, BAT and all related entities for all tobacco claims.”

    The Lung Health Foundation (LHF), too, welcomed the prospect of a settlement. “This is a meaningful first step in acknowledging decades of harm,” noted LHF President and CEO Jessica Buckley in a statement. “But financial restitution can’t make up for the loss of life. It can’t make up for the experiences of Canadians who have suffered through lung cancer and COPD.”

    Buckley called for the funds to be reinvested into vaping and smoking prevention and cessation support, mental health and addiction initiatives, and improved access to screening and care for conditions like lung cancer and COPD.”