Tobacco price maintenance case goes up in smoke

A Vancouver convenience store operator’s attempt to force Imperial Tobacco to offer it lower prices was filtered out by the Competition Tribunal.

Safa Enterprises Inc. operates “My Convenience Store”. Its competitor, New Hasty Market, pays less than it for tobacco products under Imperial’s Preferred Pricing Program. New Hasty Market is thus able to sell cigarettes cheaper than My Convenience Store. Imperial has told My Convenience Store that it is not eligible for the Preferred Pricing Program.

Safa therefore brought an application to the Competition Tribunal seeking leave to bring an application against Imperial under the Competition Act’s price maintenance provisions. Safa claimed that Imperial violated s. 76(1)(a)(ii), which applies where a supplier (here, Imperial) discriminates against a customer (here, Safa) because of the customer’s low pricing policy.

The problem with Safa’s case, as Justice Rennie pointed out in dismissing the application, is that Safa was complaining about Imperial’s low pricing policy, whereas it is Safa’s low pricing policy that would be relevant to an application under the price maintenance provisions.