Saturday 5 September 1998
Court to Coutu: Smokes must go
Drugstores obeying
FRANCOIS SHALOM
The Gazette
Some pharmacies started pulling cigarettes from their shelves yesterday, after Quebec Superior Court upheld a ban on tobacco sales in drugstores.
The ban apparently means the end of the legal war that has pitted the Order of Pharmacists against Jean Coutu, one of its own members and chief executive of the largest drugstore chain in Quebec, Le Groupe Jean Coutu Inc.
About 850 of Quebec's 1,460 pharmacies had already stopped selling cigarettes, conceding an ethical conflict between their medical vocation and the diseases caused by tobacco, but Jean Coutu had vowed to fight on against the ban by the Order.
Claiming that it would be a financial disaster for his franchisees, he defied the Order's decree of June 22 advising pharmacists to stop selling tobacco because it violated the pharmacists' professional code.
That was only three days after Quebec's Tribunal des Professions, which governs professional bodies including the Order of Pharmacists, found Jean Coutu guilty of contravening the pharmacists' code of ethics.
Coutu called the order "dictatorial" in a July 22 interview, after storming out of a press conference when a reporter asked him about the issue.
He went to court on Aug. 3 and 4 to quash the tribunal's June 19 judgment.
But the ruling late Thursday by Superior Court Justice Pierrette Rayle appeared to end his attempt to quash the order. A spokesman for the company didn't know whether Coutu would continue his legal battle, but pharmacies in his chain began removing cigarettes from the shelves yesterday.
Coutu had argued that a law adopted in the National Assembly in June gave pharmacists until Oct. 1, 2000, to stop selling tobacco.
But Justice Rayle ruled that professional governing bodies may pass their own regulations. She also got in a dig at Coutu, who is known for wearing his pharmacist's smock to public events.
"Even when pursuing commercial activities, the pharmacist maintains his health-care professional smock,'' Rayle said.
"He is not pharmacist or merchant. He is one and the other. The essence of the duality."
Lawyer Philippe Frere of law firm Lavery de Billy, which represented the Order of Pharmacists, said the ruling means that "pharmacists, therefore, remain regulated by the . . . professional code which forbids tobacco commerce."
The Jean Coutu company said in a statement that it "decided to act immediately by conforming to the decision of the Tribunal des Professions. All (our) franchisees . . . have been advised to proceed with the complete removal of tobacco products."
That job fell to clerk Marjorie Noel at the Jean Coutu drugstore on Ste. Catherine St. near Guy St. yesterday.
She was packing away the many shelves devoted to cigarettes behind one of the cash registers.
"We were actually scared this morning when we learned about this," she said.
"We thought the smokers would take it badly and yell at us. But it's been much better than we expected."
At the Pharmaprix two blocks away, however, the court ruling's interpretation seemed laxer.
The cashier responded "no problem" when asked for a pack of smokes.
Asked about that, head cashier Lucie Pepin replied that "we're told we have until midnight tonight."
Pharmaprix is owned by Imasco Ltd., whose tobacco revenues last year totalled $1.64 billion.
At Pharmaprix head office, executive vice-president Terry Landry handed out a copy of a memo to company franchisees advising them to "stop selling tobacco products . . . as of today."
Landry said he couldn't comment further.
Jean Thiffault, co-owner of a Jean Coutu franchise, said the tobacco ban "is going to cost us many thousands of dollars." But the effect will be short-lived, he added.
To replace tobacco products, he plans to start selling more "of the stuff a pharmacy should sell; things like orthopedic and diagnostic equipment."
Uniprix Inc. also directed its 200 affiliates to butt out "immediately."
Analysts in Toronto said Ontario drugstores went through the same tobacco ban upheaval two years ago, and it took only six to eight months to return to the pre-ban sales levels.
"In fact," said George Hartman of brokerage Eagle & Partners, "tobacco is a low (profit) margin product."
Its attraction lies in pulling in smokers and get them to buy other items.
"Close to 80 per cent of purchases in drugstores are impulse buys," he said. "That's why they make you wait."
Perry Caicco of First Marathon Securities said tobacco sales represent only 4 per cent of retail sales for franchisees.
So the impact will not be great on them and even less on the Jean Coutu Group, he added.
The Group is a wholesaler to its 253 franchisees in eastern Canada, and stands to lose "virtually nothing."
So why put up such a battle?
Because of the impact on impulse and secondary purchases, Caicco said.
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