Illegal Cigarette Prices Drop – Supply Strong – Cornwall Ontario – December 8, 2009

I was talking to some sources this past week, and cigarette prices have almost returned to normal here in Cornwall. Before the bridge closure wholesale prices for cases of 50 bags were about $175- $250 or $3.50-$5 per bag which the sellers would then market at $10-$15 per bag.

At the peak of the bridge crisis case prices rose to over $1000 per case with most of the product heading to major outlets outside of Montreal or closer to Toronto leaving many Cornwall sellers with no product at all. Now case prices are about $250 with no supply issue.

What seems to have happened is that it’s costing the smugglers more to get them into Canada and that cost is simply staying in the price which still is a lot less than buying legal cigarettes. The difficult part for Canada is that the high cost of law enforcement makes actions on the river expensive and not long term.

Captured cigarettes are destroyed and it costs a lot of money to prosecute those that they do catch with no real financial returns.   In other words the cost of law enforcement and prosecution are too expensive to have any long term results.

Either new laws need to be implemented which would still be expensive to enforce or a new head space needs to evolve in how to deal with illegal cigarettes and the health care costs associated with them.

For example.  If cigarettes and tobacco were reclassified to be a prescription only drug then they could be better controlled by the government.   Likewise those suffering from the medical effects of smoking illegal cigarettes could have the available medical services restricted thus giving real issue to smokers to not smoke illegal cigarettes.

These “medically” prescribed cigarettes of course would have to be sold at market rates similar to that of medical marijuana for example thus preventing the desire to purchase illegal cigarettes.  IE not taxed to the degree that cigarettes currently are.

I think the goal is to have less smokers than more in the long run as health care costs are huge.    That being said the government has a role to play in not only helping people quit smoking, but also to help those that can’t.

Prohibition never works, and right now from what I’ve read and seen we have more younger smokers evolving which is never a good thing.   Knowing that there are real ramifications for using illegal cigarettes, and positive action taken to either eradicate the smoking habit or control supply seem to me a much more realistic and conservative way to deal with the issue financially.

What do you think Cornwall?

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  1. Where exactly are these ciggs for 250. a box,please contact me!

  2. Author

    Hi Ian,

    You would have to contact your local cigarette smuggler 🙂 I do not smoke nor support cigarette smoking as I watched my dad die of the impact of cigarette smoking. It’s a horrible habit that we all pay for because the government at one point encouraged it. 50 years ago Doctors appeared in ads for cigarette companies!

  3. Brilliant. Likely the best proposition I’ve ever heard. Let’s hope it catches on.

  4. Lower the taxes. Guess no one has seen Ferris Buller. Ben Stein explains the Laffer curve, which means that there is an equiblibriam point where taxes are low enough to make evasion not worthwhile.

  5. Abolish tobacco taxes in this area and then smugglers will be out of business, or is that too simple?

  6. The governments and law enforcement have it all wrong.

    What happens if you tell someone not to do something? The first thought through their minds will be to do it. They have to come up with a more effective idea of a campaign because it is highly obvious, that nothing they have tried since the beginning of law enforcement in this country, has ever worked in the long run.

    They tried to make alcohol illegal through prohibition. Look what happened. They say don’t do pot or drugs. Look at what people do. They say smoking is bad for you, people do it anyways, and they (government) allow them to be sold and they make a pretty profit off it as well. And look what happens. If they (government) really wanted to put the money where their mouth is, and just make cigarette smoking flat out illegal, well, you can already guess what the pattern will be after that.

    Best thing is to cut the taxes if they want to quell the smuggling and at least make back some form of revenue from it. Because right now all that law enforcement and government is accomplishing in these matters is driving the trade further underground (days of speakeasy and such), and otherwise spending potloads of taxpayer money that could go towards much better things, while trying to combat a situation that they directly help to perpetuate in the first place with their greed.

    In shorter terms, they want their cake and to eat it too. Which will never work out.

    So obviously a much better thought out solution will need to be come up with. Because for the past hundred years, nothing they have done works so far towards anything they try to stop people from doing.

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