'We can do better'

As "senior partners" in the crime, governments reaped huge tax windfalls from tobacco sales while knowing the health risks smoking posed, he said, adding "we're very confident that we'll win in the end." Even if the tobacco companies lose the fight, he said, they aren't making enough money to cover the governments' claims. And if legitimate suppliers are bankrupted, smokers will turn to the criminals, he cautioned.

The Toronto Star
October 18, 2006

'We can do better'
Dana Flavelle

Pity the poor tobacco company executive.

Faced with declining demand from an aging and health-conscious population, a slew of multi-billion dollar health-care lawsuits, government-initiated smoking and advertising bans and competition from illicit rivals, the industry is besieged on all sides.

Enter Benjamin Kemball, the new chief executive officer and president of privately held Imperial Tobacco Canada Ltd., the country's largest cigarette manufacturer and maker of the market- leading duMaurier brand.

On the job just 18 months, the British-born emissary from controlling shareholder BAT PLC (formerly British American Tobacco) has been touring the nation meeting with stakeholders, including government officials and journalists.

His message is simple The industry is ready and willing to co- operate with government. But government isn't listening.

In a speech called "Angels and Demons," Kemball said that if governments stopped "demonizing" tobacco companies and "dehumanizing" their customers, the industry could help fix the problems government is facing.

For example, Imperial Tobacco could develop new, less- harmful products, such as the smokeless cigarette sold in Sweden, but it needs government's help, he told the Economic Club of Toronto yesterday. Otherwise, some critics will accuse the industry of encouraging smoking, he said.

"There is no such thing as a safe cigarette," said Kemball, who also acknowledged that smoking causes disease. "The reality, however, is that more than five million Canadian adults continue to smoke and the number is likely to remain high for the foreseeable future. Should tobacco be the only product where governments do not encourage efforts to find a way to at least reduce the risk for those who use it?"

Instead, governments are fixated on taxing cigarettes to death, a strategy that encourages trade in cheap, illicit cigarettes, most of them sold off tax-exempt native reserves, or by organized crime, often to young people, Kemball said.

Nationally, illicit cigarette sales are now the third-largest source of tobacco products. In Ontario, one in four cigarettes come from an illicit source, most often a native reserve, he said.

And while smoking bans have introduced a seasonal element to sales - reducing them in winter when people are less keen to smoke outside - he said an aging, health-conscious population has done more to curb sales than any government action.

Kemball, a smoker who has worked for BAT all over the world, said Canada has the most restrictive market on the planet.

The provincial governments that are suing the tobacco companies to pay for health-care costs related to smoking are wasting their time, he added in a later interview.

As "senior partners" in the crime, governments reaped huge tax windfalls from tobacco sales while knowing the health risks smoking posed, he said, adding "we're very confident that we'll win in the end."

Even if the tobacco companies lose the fight, he said, they aren't making enough money to cover the governments' claims. And if legitimate suppliers are bankrupted, smokers will turn to the criminals, he cautioned.

For all its faults, the tobacco industry complies with government regulations and remitted $9 billion in taxes last year, amounting to $13 in government revenues for every $1 of profit the industry makes, he said.

Kemball also said Imperial will produce its first Social Report next spring outlining its plans for reducing smoking among youth, harm from smoking and illicit trade in cigarettes.

"Too many kids still smoke and we can do better," he said.

Imperial Tobacco last published a financial statement in Canada in September, 2005.

It showed sales in the first nine months of last year fell to $2.1 billion from nearly $2.4 billion a year earlier, while profits rose to $365 million from $343 million.


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