Discount cigarettes product

Until a couple of years ago, virtually all cigarette brands in Canada were sold at the same price. There were variations between provinces, but that was only because tax rates were different from province to province.

In the last couple of years, a large number of 'discount' or 'value-for-money' brands have been launched. At first, these were all brands manufactured by small, upstart companies - often cottage operations using second-hand equipment. By the end of 2002, these small companies had almost 8% of the Canadian market. In early 2003, major manufacturers decided to move into the discount sector, led by Rothmans, Benson & Hedges (brand: Number 7, Canadian Classics), followed quickly by Imperial Tobacco (brand: Peter Jackson). In May 2004, Imperial Tobacco slashed prices on its third-largest brand, Matinée, effectively making it a discount brand also.

As a result, a substantial part of the Canadian market (probably more than 20%) is now made up of discount brands, selling at $10-12 less per carton ($1.25-$1.50 per pack of 25) than premium brands. Product display 'power walls' across the country are now covered with price signs.