RAS Blog

Category: Cigarette Smuggling

  • Ireland has the most expensive alcohol products and the second most expensive tobacco products in Europe which directly fuels the Black Market and damages legitimate businesses, says retailers.

    16 June 2016

    Statistics published by Eurostat yesterday show that Ireland is the second most expensive country in Europe for tobacco and first for alcohol. This breaks down to 189% of the European average for tobacco products and 175% for alcohol.

    The Illicit Trade 2015-2016 Implications for the Irish economy report published recently by Grant Thornton highlighted that the key driver for the illicit trade of cigarettes and tobacco products is the increasing level of excise tax. Retailers Against Smuggling Spokesperson and retailer Benny Gilsenan commented “increasing excise creates a very viable and extremely profitable business for criminals to sell illegal cigarettes for €3-4 on the streets. This not only leaves the Exchequer at a loss of over €240 million per annum, it directly impacts legitimate, tax and license paying businesses”.

    “Due to the excise increase, we have now reached a stage where the price of legitimate products is over double that of smuggled cigarettes. For most consumers, that’s a no-brainer and they will choose the cheap, illegal products,” Mr. Gilsenan said.

    The Grant Thornton concluded that excise increases result in lower priced illicit alcohol products being more attractive for consumers. Mr Gilsenan noted that “when products such as alcohol are as expensive as they are now in Ireland, consumers turn to distilling their own or buying counterfeit alcohol which is incredibly dangerous”.

    Mr. Gilsenan continued, “The month of June alone has seen Irish Revenue seize over 8.6 million illicit cigarettes which is over 8 million more than in June 2015 and following the hike in prices in October 2015 budget, I would seriously question the effectiveness of increasing excise tax. As it stands 12% of the cigarettes on the Irish market are illegal. If the Government continues to increase excise on cigarettes and alcohol, you will see more small stores closing and eventually criminals taking over the market completely” stated Benny.

  • As the Black Market continues to grow, what will the new Government do differently to tackle the blight of smuggling?

    27 May 2016

    Despite the prevalence of smoking in Ireland decreasing from 22% in 2009 to 17% in 2014 (Department of Health), the illicit trade of tobacco continues to be a huge burden on the public purse with an annual loss of revenue to the Exchequer. In the first five months of 2016 Revenue seized smuggled cigarettes and tobacco products worth almost €12.3 million to the Exchequer, an increase of €2 million during the same period in 2015. Meanwhile, the solid fuel sector has expressed concern over the fact the Revenue have no reliable way to estimate the size of the smuggled solid fuel trade across the border.

    This €2 million increase came following the excise increase of 50c in October 2015. Benny Gilsenan, retailer and Retailers Against Smuggling (RAS) spokesperson for Leinster, commented “I struggle to see the logic of increasing excise tax not only because it drives people to the Black Market for their €3-4 pack of illegal cigarettes but it also leads to a tobacco tax yield budget shortfall which was calculated by the government in 2015 as being €223 million. In the run up to the budget, the Government really has to address the elephant in the room which is that excise increases are only contributing to the problem. ” On that basis alone, RAS calls for a moratorium on further excise increases until levels of smuggling are tackled.

    In its 2015 Annual Report, Revenue found that 12% of cigarettes packs held by smokers were classified as illegal. Benny continued “The fact that 1/10 cigarette packs are illegal highlights that more intervention is necessary by the new Government to cut off the blood supply of these multi-million euro businesses run by criminal gangs. Legitimate businesses like mine are being directly affected. We pay all of our taxes, the tobacco retail licence fee and adhere to the Show Me ID programme so the Government should be protecting our legal businesses.” Increased spot checks by Environmental Health Officers on non-retail outlets are necessary to prevent the sale of illicit tobacco products and solid fuel.

    “To make matters worse, of the 5,927 seizures in 2015 fines averaging €2,656 were imposed in just 89 cases. The current legislation for attaching fines only covers those already in employment. It is clear to me that this needs to be extended to those unemployment or on benefits in order to begin to deter people from selling smuggled goods on our streets” said Benny.

  • Retailers group welcome Illicit Trade report that highlights attractiveness of smuggling to criminals in Ireland

    9 May 2016

    The Illicit Trade 2015-2016 Implications for the Irish economy released today by Grant Thornton highlights that the key driver for the illicit trade of cigarettes and tobacco products is the increasing level of excise tax. Retailers Against Smuggling spokesperson and retailer Benny Gilsenan reacted today: “Increasing excise tax is nothing more than a tax on the poor and small legitimate businesses who’s legal cigarette trade can account for 20-30% of business.” RAS welcomes the recommendations to increase international cooperation with EU and non-EU law enforcement agencies, strengthen controls in Irish ports and airports and promote security preventive measures for all persons engagement in the tobacco supply chain.

    In regards to solid fuel smuggling the Report recommends the auditing of fuel suppliers by Revenue, obtaining records of the same based in Northern Ireland and registering all solid fuel traders as is done with petroleum oil suppliers. Benny went on to say “Grant Thorton’s yearly report highlights the impact the Black Market has not only to our economy but to the legitimate businesses who are selling legitimate products.”

    One of the recommendations in the Report is to increase the penalty for those caught smuggling cigarettes because the low penalties imposed in Ireland make it an attractive trade for criminals and convictions have decreased between 2010 and 2014 from 97 to 53. “These criminals go largely unpunished and with fines averaging €2,700, this is a lucrative illegal business for criminal. Now we have a new government it is time they tackle the illegal trade that is devastating small businesses across the country.”

  • Retailers call for next Programme for Government to seriously commit to tackling the illegal trade of tobacco and fuel.

    15 March 2016

    In a letter sent today to all parties, Retailers against Smuggling (RAS) set down an Action Plan which it believes will go a considerable way in stamping out the unacceptable levels of competition legitimate retailers’ face from criminal gangs who sell illegal tobacco and fuel.

    “While the formation of the next Government is not yet clear, the issue of the illegal tobacco and fuel trade continues to be a significant issue for retailers nationwide. Small legitimate businesses rely on the legal cigarette trade for 10-30% of our business and these criminals selling cigarettes on our streets are directly impacting us. We believe the targeted approach in our action plan will be effective” said Benny Gilsenan, spokesperson of RAS.

    A key ask of the RAS Plan is the establishment of a Working Group on illegal trade in Ireland. This Group would invite all interested and affected parties to participate and would review the impact draft legislation would have on smuggling. These findings could then feed into policy debate in Dáil Éireann. “This Group would give retailers and others affected by the black market the opportunity to highlight the impact it has on their businesses and communities” commented Mr Gilsenan.

    In addition to the Working Group, Retailers Against Smuggling Action Plan also calls for:

    1. Making it illegal for a person to purchase illicit cigarettes
    2. Additional resources for An Garda Siochána and the Revenue Commissioners, for the work of the Joint Agency Task Force, set up under the terms of the 2015 A Fresh Start Agreement, to tackle cross-jurisdictional organised crime
    3. A moratorium on further excise increases until such increases can be proven not to encourage smuggling as a result of price differentials.
    4. An extension of the Fines (Payment and Recovery) Act 2014 to cover all those deemed to have illegally smuggled cigarettes or fuel, regardless of that person’s means.
    5. An extension of the investigations scope of Revenue to non-registered retail outlets; for those outlets which are repeat offenders of selling illicit cigarettes and tobacco, the serving of closure orders.
    6. A repeal of market licences by local Councils where illegal goods have been found to be sold
    7. Increased inspections of non-tobacco and non-fuel retail shops by the EHO

    Retailers Against Smuggling are fully behind the Joint Agency Task Force, set up under the terms of the 2015 A Fresh Start Agreement, to tackle cross-jurisdictional organised crime. “Smuggling along the Border has been a major route of black market goods that threaten the livelihood of small retailers right across the country. We have had enough and it is time to put a stop to this criminality once and for all” said Mr Gilsenan.