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Last Updated: Saturday 31 October 1998  TOP STORIES

Tobacco giant sues Victoria over 'trade secrets' dispute

The Vancouver Sun

Jim Beatty, Sun Legislature Bureau Vancouver Sun

VICTORIA - Canada's third-largest tobacco manufacturer, RJR-Macdonald Inc., launched a B.C. Supreme Court lawsuit Friday against the provincial government, claiming its anti-smoking legislation is unconstitutional, intrusive and a threat to the company's competitiveness.

The writ was filed on the same day that Canada's two largest tobacco makers -- Imperial Tobacco and Rothmans, Benson & Hedges Inc. -- reluctantly agreed to comply with the same regulations as set out in the Tobacco Sales Amendment Act.

But a spokesman for Rothmans said his firm is also considering a lawsuit against the B.C. government.

RJR-Macdonald's suit is sure to heat up the raging B.C. tobacco war and comes weeks before the provincial government is expected to launch another tobacco-related case against Canada's three largest cigarette makers.

The writ claims the B.C. government exceeded its constitutional authority by requiring tobacco companies to spend enormous amounts of money revealing trade secrets such as the chemical ingredients in cigarette smoke.

RJR-Macdonald, which makes its cigarettes outside the province before selling them to wholesalers, claims only the federal government has the authority to regulate inter-provincial trade.

"The production, marketing and sale of tobacco products are regulated by the Parliament of Canada," not the B.C. government, the writ claims.

To disclose trade information about the company's products, which include Export "A", the fifth-best-selling cigarette in B.C., would reveal trade secrets that could damage the company's national competitiveness.

"If there were a public release and distribution of these secrets anywhere, these secrets would become public everywhere," the writ claims.

Until Friday, cigarette makers claimed the tight government deadline would make it impossible to achieve.

"We complied but we're not in agreement with the legislation," said John McDonald, director of public affairs for Rothmans, Bensons & Hedges. "The information is basically meaningless anyway. We don't understand why this information is being sought."

McDonald said Rothmans may also launch a lawsuit based on the government's anti-tobacco legislation.

"If we have to challenge them in court, we'll do so. It's certainly something we're looking at doing," McDonald said from Toronto.

Tough new legislation introduced this year by the B.C. government for the first time in Canada forces tobacco companies to reveal the contents of cigarettes, the contents of smoke, and will force the three largest companies to pay the government about $20 million a year to help defray the costs of an anti-smoking campaign. In addition, the government brought in legislation enabling it to recover its tobacco-related health-care costs. B.C. Attorney-General Ujjal Dosanjh has promised to launch a lawsuit against the tobacco makers by the end of the year.

The B.C. government estimates it annually spends $1.3 billion on extra health care, social services, lost productivity and crime-prevention costs associated with smoking.

Health ministry spokesman Jeff Gaulin said the regulations are part of Victoria's anti-smoking campaign, which the government boasts is the most aggressive in Canada.

"We think the public has the right to know what goes in to, and what comes out of, cigarettes," he said.

Gaulin said the information revealing the ingredients of cigarette brands, and the smoke they create, will be made public but "we haven't decided how to release the information."

David Laundy, B.C. spokesman for the Canadian Tobacco Manufacturers' Association, said the industry supports providing consumers with relevant, understandable information about cigarettes, but said the province has gone overboard with its demands.

"This information is extremely complex. It is measuring components of smoke in minute quantities. The end product is that the report is essentially meaningless to a lay person," Laundy said, saying the information can deceive the public unless it is put in proper perspective.

The cigarette makers claim many of the components found in cigarette smoke can be found naturally in food, drinking water and the air.

In addition to tar, nicotine and carbon monoxide, the government requires testing for arsenic, benzene, benzoapyrene, cadmium, hydrogen cyanide and toluene, all of which have been found in cigarette smoke.

The cigarette makers say the government also requires testing for smoke components that no laboratory in the world can test.

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