RAS Blog

Category: Fuel Smuggling

  • Retailers Against Smuggling call for government to increase resources in budget to combat smuggling 

    Retailers Against Smuggling call for government to increase resources in budget to combat smuggling 

    Illegal tobacco sales cost the Exchequer €384 million in 2022, Revenue needs more funds to combat smuggling  
     

    In its pre-budget submission released today, Retailers Against Smuggling have called for increased resources for Revenue to combat smuggling at a time where 30% of tobacco products consumed in Ireland are either illegal or Non-Irish Duty Paid, costing the Exchequer €384m in 2022. 

    RAS proposes that 30% of funds collected from the new licence fee is ringfenced for initiatives that will meaningfully deal with the growth of smuggling activities in the country. Currently, Revenue has 23 detector dog teams and three mobile x-ray scanners. With more than 1.2 million freight vehicles and trailers passing through the three main Irish ports last year, Revenue faces a mammoth task in detecting counterfeit goods being smuggled into the country and so meaningful resources are desperately needed against this backdrop. 

    In the space of just one week (25-31 May, 2023) Revenue seized nearly 8 million cigarettes at Dublin Port representing a loss of €5m to the Exchequer; with two further major seizures of 10 million cigarettes on June 9, and €10 million worth of counterfeit cigarettes seized in Dublin on July 4, showing the size of the illegal tobacco market in Ireland.   

    The magnitude of this issue can be best explained by the outcome of a recent poll by Ireland Thinks which found that 32% of smokers said they were prepared to purchase illegal tobacco. To sum this up, Revenue estimates the amount lost to the Exchequer from illegal cigarettes to be more than €2.1 billion between 2013 and 2022. 

    17% of all cigarette and roll-your-own packs in Ireland have been found to be illegal, with a further 13% being non-Irish Duty Paid, representing 30% of all tobacco products in the country. Rates of illegal cigarettes in 2022 jumped by 43% compared to the previous year (Source: Revenue Illegal Tobacco Products Research Surveys 2022). 

    Under the Public Health Bill, the new licensing system will require a retailer who wishes to sell tobacco products or nicotine inhaling products to apply for an annual licence for each outlet with a yet unspecified fee, instead of a once-off fee of €50 in the current registration system. This new system will add further unnecessary administrative burden and cost on retailers.  
     

    The border with Northern Ireland is also causing issues for retailers. According to a recent RTE Prime Time Investigates programme from April 2022, 100,000 tonnes of smoky coal smuggled from Northern Ireland (which is not subject to carbon tax) is costing the Exchequer €8.7 million. If this continues, by 2025, a total of €77 million will be lost to the State through carbon tax evasion alone. 
     

  • Budget 2021 excise hikes will fuel further smuggling and penalises legitimate retailers

    Budget 2021 excise hikes will fuel further smuggling and penalises legitimate retailers

    Retailers Against Smuggling has expressed grave concern that yet another excise increase will lead to further increased rates of tobacco smuggling directly impacting legitimate registered retailers. The group was reacting to Budget 2021 announced by the Minister for Finance, Paschal Donohoe TD which included an increase of 50c on tobacco, bringing the cost of an average packet of 20 cigarettes to €14.00.

    Commenting National Spokesperson for Retailers Against Smuggling, Benny Gilsenan said: “It is very disappointing to see honest retailers take yet another blow with today’s excise increase which will inevitably make it even harder to compete with a growing black market. We have some of the highest rates of duty on tobacco products in the EU and it is no wonder that Ireland continues to be a target for tobacco smugglers, even while there is Covid-19 restrictions on travel in place.”

    In Revenue’s 2019 Annual Report, its Illegal Tobacco Products Research Surveys revealed that 15 per cent of cigarette packs held by smokers surveyed were classified as illegal. Also, in the Department of Finance’s own Tax Strategy Group paper it was noted that Revenue Commissioners have previously indicated that further increases in excise duties may not lead to increased revenue yields.

    Mr Gilsenan added: “We fully expect that the percentage of smuggled tobacco on the Irish market will continue to rise because of the increase, voiding any potential gains to the exchequer. As consumers turn towards the black market, ultimately it is the retailer who suffers through the loss of not only the legal purchase of cigarettes but also any potential additional purchases that person might make when they are in the store.

    “With Covid-19 restrictions set to be a reality of life for months to come and the looming uncertainty of Brexit, the detection and seizure of illegal tobacco products must remain a priority for Irish authorities, with increased awareness of the elaborate means criminal gangs are utilising to transport these huge volumes. Revenue and An Garda Siochana must be given the correct resources to ensure that criminals don’t continue to reap the benefits of the high cost of tobacco products.”

  • ZERO seizures of illicit solid fuel in 2019 despite growth in black market

    5 April, Dublin

    Retailers, suppliers and manufacturers of solid fuel in Ireland are outraged today following a response to a parliamentary question from Minister for Finance Paschal Donohoe last week. Fianna Fáil Deputy Jim O’Callaghan asked the Minister about seizures of smuggled solid fuel to date in 2019 to which Minister Donohoe stated that there have been none.

     

    Managing Director of CPL Fuels Niall McGuinness said “the fact that there have been no seizures this year is completely unacceptable. Manufacturers, suppliers, retailers and the dogs in the street know that solid fuel is being illegally sold all over the country. The Minister’s response is extremely worrying for the entire supply chain, we need support from the Government especially as Brexit is fast approaching”

     

     

    Large quantities of cheap, non-SFTC (Solid Fuel Carbon Tax) paid solid fuel is being sold illegally and in plain sight as far away from the border as County Kerry. Solid fuel can represent up to half of some retailers’ turnover, particularly in the Winter months.  Due to the stark differences in tax policies on both sides of the border, 26 tonnes of coal (one truck load) is €2,217 more expensive in the Republic of Ireland than in Northern Ireland. Based on our calculations, carbon tax evasion alone at 20% results in an estimated loss of €9.6 million to the State. The amount lost to retailers at this rate is even more staggering at €36.5million a year.

     

    The Minister also stated that just €640,000 in lost revenue from SFTC has been recovered out of a potential €9.6 million year on year loss. Mr McGuinness concluded “this is simply not good enough. Not only are we losing out on sales, the Exchequer is losing out on receipts. Pair that with the fact that the fuel coming over the border is smoky coal and bad for the environment. It is the Irish public that are ultimately paying the price.”

     

    Currently there is no deterrent to purchasing smuggled goods as it is not a crime. Retailers Against Smuggling supports the Sale of Illicit Goods Bill which aims to deter people from buying illicit alcohol, solid fuel and tobacco by introducing on-the-spot fines for buying goods where taxes have not been paid. This bill is a necessary measure to protect small Irish retailers.

    – ENDS –

  • One in Three Retailers Along the Border Concerned that Brexit will Create a Bigger Market for Smuggling Along the Border.

    28th September 2017, Dublin

    A cross-border survey conducted by Retailers Against Smuggling (RAS) has revealed that one in three retailers in Ireland are concerned about the rise in criminality and illicit trade following the decision of the UK to leave the European Union last year. Responses from 114 retailers in the counties of Donegal, Cavan, Monaghan, Sligo and Louth were recorded, along with 101 additional retailers across Northern Ireland. The survey results come weeks after Minister for Foreign Affairs Simon Coveney declared that Ireland’s interests would be at the forefront during Brexit talks. Smuggling and illicit trading increases must remain an important factor for the Irish government during border negotiations.

    The results showed that of those surveyed in the border counties, one third of retailers feel Brexit will create a bigger market for smuggling in the county, while 44% have noticed a significant increase in smuggled products and illicit trade in recent years, particularly since Brexit. This figure rises to 56% of their counterpart retailers north of the border.

    One-third of all retailers surveyed believe that Brexit will lead to a further presence of the black-market along the border and significant losses to the Exchequer, as well as their own businesses.

    RAS spokesperson and small business owner, Benny Gilsenan said “when a customer doesn’t buy their cigarettes in my shop, that means they’re not buying their pint of milk, they’re not buying their sliced pan. It has a huge knock on effect on small businesses”.

    Retailers on both sides of the border can no longer compete with the illicit trade of smuggled products. In terms of illicit trade, cigarettes and loose tobacco are by far the most urgent concern for retailers. Mr Gilsenan continued “smuggling is a constant concern for us as retailers. A packet of cigarettes bought on the street costs the consumer less than half price of what they would pay in a shop. A legitimate retailer selling a packet of cigarettes for €11.50 simply cannot compete with a smuggled pack that costs just €5. The Government needs to protect legitimate Irish retailers from the consequences of illicit trade”

    According to Revenue’s Illegal Tobacco Products Research Survey 2016, 10% of cigarette packs in Ireland are classified as illegal and a further 8% are Non-Irish Duty Paid. In a report released by Grant Thornton in 2015 found that a key driving force for the illicit trading of tobacco and alcohol is the continuously increasing level of excise duty on products. Half of all Irish retailers surveyed believe that the key to undermining cross-border smuggling of tobacco and alcohol is to harmonize tax and price differentials between Northern Ireland and the Republic of Ireland.

    The survey also revealed a shocking lack of trust in authorities both north and south of the border, with only 13% of those surveyed having confidence in the ability of authorities to tackle smuggling. There is a massive disparity between alcohol seizures and summary convictions in Ireland. In 2016 there were 1,875 seizures of illicit alcohol in the country, but only four summary convictions. Border retailers indicated in the survey that they would like to see the purchasing of illicit goods to be made an offence. This provision was one of the key measures proposed under the Sale of Illicit Goods Bill, which made it an offense for a person to buy alcohol, tobacco or solid fuel from an unregistered retailer.

    A roundtable discussion was held yesterday in Dublin to tackle Brexit, the Border & the Black Market. The event was co-chaired by Kevin Doyle, Group Political Editor at the Irish Independent, and Allison Morris, Security Correspondent from the Irish News. Members of An Garda Siochana, the PSNI, HMRC and political parties from both the Republic and the North met to discuss the issues that retailers on both sides of the border will face in the coming months and years. “The people that attended this roundtable discussion are the ones who can make a real impact. Events like this need to happen more often, it’s so important to keep the conversation going between officials in the Republic and the North. We need to work together on this.” Said Mr Gilsenan.

  • Retailers Against Smuggling (RAS) disappointed at increase in excise tax which will directly impact retailers and the poorer in our society.

    11 October 2016

    This comes despite the fact that his own Department has acknowledged that such increase, as a result of the level of smuggling and resulting loss to the exchequer, will not increase the overall tax take of the State.

    Retailers Against Smuggling Chairman Benny Gilsenan said this afternoon in Buswells Hotel “This move is nothing more than a measure which impacts the poor in our society– a greater % of poorer people in Irish society smoke than any other social class. To add insult to injury, by pushing consumers to affordable smuggled products, Minister Noonan’s measure will also help criminal gangs to sell their smuggled product which in turn negatively impacts legitimate retailers. There are TDs across the country who are vocal in their support of retailers and understand the negative impact on the trade of continual excise increases – despite this, Minister Noonan seems set on ignoring all of this to create the illusion of income.”

    Benny continued: “We are very disappointed. We pay our taxes, comply with all the laws of the land, but Minister Noonan is penalising us and our customers, to create an illusion of tax take which ultimately hurts the poor and aids criminal gangs.”

  • Retailers welcome cross-border Joint Agency Task Force’s first report on its efforts in tackling cross jurisdictional crime

    5 July 2016

    Retailers Against Smuggling (RAS) today welcomed the first report from the Joint Agency Task Force, which was set up under the Fresh Start, The Stormont Agreement and Implementation Plan by the British and Irish governments and the Northern Ireland Executive as part of “a concerted and enhanced effort to tackle organised and cross jurisdictional crime”. The report, which prioritised excise fraud and illicit trade as part of its work programme, was discussed at the North South Ministerial Council yesterday at Dublin Castle.

    Stephen Daly, retailer and RAS Spokesperson, commended the Task Force today “RAS welcome the great work done by all the agencies involved in their efforts to tackle organised crime along our border. This is a huge step in the right direction and will help ensure legitimate retailers in the border counties are the only sellers of these products and ensure carbon tax and tobacco excise is paid to the relevant coffer.”

    Grant Thornton’s Illicit Trade 2016 report stated that the high price of tobacco in Ireland and Northern Ireland is an incentive to organised criminals to supply cheaper illicit products because their margins of profit are so large costing the Irish Exchequer and right holders/retailers €250 million in 2015 alone. Mr Daly concluded ”We look forward to a month being dedicated to tackling the smuggled solid fuel and tobacco products and hope that the Irish government consider our pre-Budget 2017 submission to compliment the hard work our agencies are doing along the border”.

    Retailers Against Smuggling Pre-Budget 2017 submission:
    • A moratorium on further excise increases until such increases can be proven not to encourage smuggling as a result of price differentials.
    • Enforcing the offence of purchasing illicit cigarettes.
    • The establishment of a Working Group on illegal trade in Ireland in which all interested parties are invited to participate.
    • Full use of existing resource and an increase in same over time to allow the Revenue Commissioners, with An Garda Siochána, to enhance their efforts to tackle tobacco and fuel smuggling.
    • Support, through resources pledged 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.
    • 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.
    • 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.
    • A repeal of market licences by local Councils where illegal goods have been found to be sold.
    • Increased inspections of non-tobacco and non-fuel retail shops by the EHO.
    • Regular spot checking of fuel transports on the road for compliance with carbon tax and VAT legislation.

  • 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.