Innovation

Time To Stand Up

The Quebec government, like many other provinces in Canada have been introducing new regulations on flavour tobacco, e-cigarettes, smoking on patios, etc.

Under the democratic process, these new regulations pass through a process where stakeholders have a chance to contribute to the making of sound government policy.

Bill 44 was introduced early in 2015 and had gone through the process of first reading and second reading with consultations.  However, at the recent stage of clause by clause review before the third and final reading, the government introduced 2 new and fundamentally different amendments to the Bill.

These big amendments concern tobacco trade payments to retailers and packaging regulations.

The Quebec government wants to forbid any and all payments to convenience store retailers from manufacturers and wholesale distributors concerning tobacco – incentives which include trade loyalty websites, space payments, performance payments, volume payments, mystery shop rewards, etc…  At the government’s own estimate – they believe that these payments are between $45,000 and $100,000 per year per retailer.  In other words, the government in their wisdom wants to reduce $45,000 to $100,000 (their numbers)  in compensation to an already fragile convenience industry (fragile in that contraband tobacco continues to grow and lottery moves to digital smartphone platforms – both within the control/influence of government policy).

The second amendment concerns increasing warning labels to approximately 98% of the packaging – making this new regulation more extensive than plain-packaging introduced in Australia 2 years ago (incidentally where tobacco consumption is rising since the introduction of plain packaging). This could wipe out the slim and super slim tobacco category, and significantly make it more difficult for retailers to select the right product asked for by their adult tobacco customers.  Re-ordering product, training staff, and other issues will certainly present themselves with this new packaging regulation.

The Bill has been written very broadly which should concern all – as it will be damaging to all.

More details to follow as this alarming development has profound impacts to convenience store retailers.