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TDAC seeks solution for gap in Canada-US tire prices


February 15, 2013
By Aggregates and Roadbuilding

February 15, 2013, Drayton,
Ontario –
The Senate Committee on Finance has confirmed the Tire Dealers
Association of Canada's (TDAC) findings that discriminatory country pricing by tire manufacturers is
forcing tire consumers across Canada to pay anywhere from 30 to 50% more for
the same tires selling in the U.S.

February 15, 2013, Drayton,
Ontario –
The Senate Committee on Finance has confirmed the Tire Dealers
Association of Canada's (TDAC) findings that discriminatory country pricing by tire manufacturers is
forcing tire consumers across Canada to pay anywhere from 30 to 50% more for
the same tires selling in the U.S.

 

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"Many U.S.-based tire manufacturers use their
supplier contracts with Canadian tire retailers to force them to buy tires
wholesale directly from their Canadian affiliates rather than directly through
much less costly U.S. wholesale distribution channels," says Bob Bignell,
Chair of the Tire Price Disparity Committee of the Tire Dealers Association of
Canada. "If a Canadian retailer buys wholesale tires from a U.S. wholesale
distributor rather than through the manufacturer's Canadian sales division,
both the Canadian retailer and the U.S. distributor have their supplies of tires
cut off by the manufacturer. In the end it's the Canadian tire consumer who
gets gouged by higher tire prices."

 

Notwithstanding tire manufacturers' practices
of barring cheaper U.S. wholesale tires from being imported into Canada, even
Canadian-made tires are more expensive in Canada than they are in the U.S. In
October 2011, TDAC wrote to Finance Minister Jim Flaherty noting that,
"Incredibly the wholesale prices of tires manufactured in Canada are 30%
cheaper in the United States than in Canada."

 

Bob Bignell notes that, "Given that the U.S.
and Canadian dollars have been at parity for a long time, that many tires sold
at higher prices in Canada are made here and that there are no import duties or
tariffs on imported tires, there is no excuse whatsoever for tire prices in
Canada to be more than 5% higher than they are in the United States. There is
simply no rationale whatsoever for a tire made in Nova Scotia to cost a Nova
Scotian more than an American."

 

Over the next year TDAC will be undertaking a
number of measures to protect Canadian consumers in the next year:

  
A Canada-U.S. border-wide, brand-by-brand tire
price survey of passenger, light truck and medium-truck tire prices to
highlight the worst offenders in penalizing Canadians on tire pricing.

  
Publishing the results of those price surveys
and making those results available to consumers and Canadian regulators.

 

Petitioning tire manufacturers directly on
behalf of Canadian tire consumers to get them to recognize the consumer impacts
of the massive disparity between Canadian and U.S. wholesale tire prices. The
basic premise of TDAC's position to manufacturers is that "There is no
excuse for Canadians paying more for tires than Americans do."


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