| Tradition
was, Canadians didn't smoke U.S. cigarettes. Is RJ Reynolds trying to make a break with
tradition? While Canadians watch
American television and movies, gossip about American celebrities, eat at American
food-chains and buy American goods, they have remained faithful to Canadian brand
cigarettes.
The reasons are as complex as nicotine
addiction, tobacco politics and Canadian-U.S. relations.
Canadians smoke British-style Virginia
tobacco because that's the cigarette they become addicted (and loyal) to.Virtually all the
tobacco smoked in Canada comes identical plants grown in 5 counties in south-west Ontario.
Many Canadian smokers sneer at U.S. brands.
Even world-leaders like Camel and Marlboro have little appeal north of the border.
Unlike American cigarettes, Canadian brands
are not 'blended' or flavoured. Subtle variations between brands are achieved by filters,
and by selecting different grades and different parts of the tobacco plant.
Tobacco companies have kept the loyalty of
smokers, farmers and politicians alike by using their monopsony with Canadian tobacco farmers to protect the farmers'
monopoly in Canada.
They have even argued that they need to
protect Canadian brands from the spill-over advertising of the U.S. cigarette brands.
(U.S. magazines with their heavy content of
Winston ads are widely read in Canada.)
As a wholly-owned subsidiary of
RJ-Reynolds, RJR-Macdonald now seems poised to exploit that spill-over advertising.
This July, RJR-Macdonald changed its
packaging of Winston cigarettes and began distributing promotional matches. This is one of
the first retail promotions in Canada of U.S. brands in recent history.
Sales of Winston cigarettes in the first
half of 1998 (before the new package) were 25 million, in line with sales of recent years.
The impact of the new packaging and promotion may be seen during third and fourth quarter
sales. |
