RAS Blog

Category: illicit cigarettes

  • Excise increases on tobacco will push consumers to growing black market, retailers warn

    Excise increases on tobacco will push consumers to growing black market, retailers warn

    Attachment orders required to make deterrents to smuggle tobacco more robust

    Continuous excise increases on tobacco are driving Irish smokers towards a growing black market, fuelling significant growth in smuggling activity. That is according to Retailers Against Smuggling (RAS), who have outlined why Budget 2022 should not increase excise on tobacco products considering the unfair ‘competition’ legitimate retailers face from criminal gangs exploiting the demand for illegal tobacco products.

    Commenting on the organisation’s Budget submission to Minister for Finance, Paschal Donohoe TD, national spokesperson for RAS, Benny Gilsenan said: “An excise increase on tobacco products in Budget 2022 will only serve to further damage an already weakened retail sector and will provide increased opportunity for large-scale smuggling and ant smuggling of tobacco products.

    “The policy informing Budget 2022 must account for the need to create a sustainable, flourishing, and legitimate retail sector as we emerge from the pandemic. As retailers, we continue to compete with a very active black market in tobacco products which accounts for 15% of all cigarette packs in Ireland not to mention the 9% of cigarette packs smoked which are bought in from other jurisdictions.”

    Retailers concern around return of ant smuggling

    Mr Gilsenan added: “There is genuine concern amongst retailers that increased demand for the black market spurred by excise increases will lead to an accelerated return of ant smuggling as international travel resumes. Ant smuggling is typically carried out by smugglers travelling on low-cost airlines to purchase cigarettes in countries where it can cost as little as €2 for a pack of 20 cigarettes.

    “Ant smugglers are bringing tobacco products back into Ireland for sale on the streets for less than half of the Irish retail price, making it impossible for legitimate retailers like myself to compete. We have already witnessed eight significant tobacco seizures by Revenue at our airports so far this year and any increase in excise duty in Budget 2022 will only push more of the public to take advantage of this illegal option that bypasses the local shopkeeper and damages revenues to the State.”

    Attachment orders required to make smuggling deterrents more robust

    Only 55 cases of illicit tobacco trade resulted in prosecution throughout 2020 which is in direct contrast to the high volume of illicit cigarettes and tobacco seized by Revenue over the same period valued at over €37m. The scale of the problem was further emphasised last week with three major tobacco seizures by Revenue at Dublin Port valued in excess of €11.1m.

    Mr Gilsenan concluded: “The lack of prosecutions versus the volume of illicit cigarettes, indicates that the deterrents for the sophisticated criminal gangs and small-time criminals behind the black market are ineffective, with potential profits outweighing any penalties that might be imposed. Budget 2022, in the context of excisable goods, should focus on rendering existing enforcement regulations more robust by introducing attachment orders to violations, thereby providing the means to the State to recoup losses to the Exchequer driven by smuggling. Recent large-scale cigarette and tobacco seizures in the summer of 2021 point to criminals getting ready to compete aggressively with legal retailers in Ireland. Let’s not give them that opportunity.”

    Download the Retailers Against Smuggling Pre-Budget 2022 Submission here

  • No let-up in tobacco smuggling through Ireland’s ports despite additional Brexit checks

    No let-up in tobacco smuggling through Ireland’s ports despite additional Brexit checks

    Significant tobacco seizures at Ireland’s ports in 2021 provide a clear indication that illicit trade is stronger than ever despite the deterrent of additional Brexit related Revenue checks. That is the reaction from Retailers Against Smuggling (RAS) after Revenue seized four tonnes of tobacco worth over €2.4 million at Dublin Port this week.

    This is the fourth major tobacco and cigarette seizure by Revenue at Ireland’s ports this year.

    In February, two separate seizures in one day at Rosslare Europort yielded 5.7 million cigarettes while in January, two tonnes of tobacco were seized at Dublin Port. The potential loss to the exchequer of these four major seizures alone equates to €6 million, demonstrating that Irish ports remain a hotbed for smuggling.

    Commenting, national spokesperson for RAS, Benny Gilsenan said: “The issue of tobacco smuggling remains a huge threat for registered and legitimate tobacco retailers like myself across Ireland, whose legal cigarette trade can account for 20 – 30 per cent of their business. These major seizures when examined alongside the additional detections made at our airports and through warranted searches, demonstrate that the black market continues to be exceptionally active in 2021. The scale and means used to smuggle the tobacco seized at Dublin Port this week might also suggest that it was intended for further illicit cigarette manufacturing.

    “While we commend and fully support the hard work undertaken by Revenue and An Garda Síochána in the fight against illicit trade, our fear is that these seizures are only the tip of the iceberg. If this is the extent of the goods being seized, it is frightening to think about the volume of tobacco making it into the country unchecked costing the exchequer millions of euro in lost revenue and putting the livelihoods of retailers at stake.”

    In its headline results for 2020, Revenue reported a total of 4,390 seizures of cigarettes and other tobacco with a value of €32.7m, this compares to a value of €10.52m for 2019 representing a threefold increase.

    Mr Gilsenan added: “It is very plausible that Covid-19 international travel restrictions over the past twelve months has led to a growth in demand for the black market, which these criminals are trying to exploit by any means. For example, my own store alone experienced an initial 40 per cent rise in tobacco sales when travel restrictions were introduced but this has dropped right back to normal levels. So it begs the question, where are these sales going given that travel restrictions remain in place?

    “If we are to seriously tackle the issue of illicit trade there needs to be much stricter sanctions and more prosecutions for those who are caught smuggling. It is clear from the level of seizures recorded in 2020 and so far this year that the current deterrents to smuggling are not strong enough.”

  • Seizures worth over €7.9m indicate cigarette smugglers are thriving despite coronavirus

    Seizures worth over €7.9m indicate cigarette smugglers are thriving despite coronavirus

    Rigorous monitoring and increased checks by Revenue are essential to combat a potential increase in illicit trade of cigarettes over the coming months. That is the call from Retailers Against Smuggling (RAS) who have raised concern over the potential growth of the black market as a result of Covid-19 and the upcoming ban on menthol cigarettes in Ireland, which comes into effect on Wednesday, 20th May 2020.

    Commenting, national spokesperson for RAS and Dublin based retailer, Benny Gilsenen said: “Significant seizures of cigarettes by Revenue in recent weeks, including two hauls at Dublin Port worth over €7.9m, indicates that the black economy is alive and well. As retailers across the country are struggling to adapt to the new operational realities and costs of Covid-19, these seizures tell us that it is very much business as usual for the criminals.

    “While we commend the efforts of Revenue in ensuring that these cigarettes do not reach the black market, including another seizure in Donegal over the weekend worth €40,000, there is no room for complacency in clamping down on cross-border smuggling, particularly in light of the new regulations coming into effect this month. Retailers like myself are very concerned that the ban on menthol cigarettes, which account for approximately 18 per cent of tobacco sales in Ireland, will result in a widening of a black market that is already having an adverse effect on local retailers. We have already witnessed a growth in the trade of illicit menthol cigarettes in the UK over recent months and there is a real risk we will see a similar trend emerge here.”

    The ban is being introduced to follow the completion of a four-year phasing-in period under a 2016 EU directive on tobacco products. According to its 2019 Annual Report, Revenue seized 3,215 cigarettes and 1,445 other tobacco products, at a total value of €10.52 million. This represented a 75 per cent drop since the same period in 2018.

    Mr Gilsenen added: “Looking at the significant drop in seizures between 2018 and 2019, it is glaringly obvious that criminal gangs are using whatever means necessary to evade detection and keep their illegal finances thriving. The spate of seizures in the last week should serve as a wake-up call for everybody.”

  • Massive spike in illicit roll your own tobacco damaging legitimate retailers

    Retailers Against Smuggling (RAS) have expressed their outrage at the figures shown in Revenue’s Annual Report and Tobacco Products Survey 2018, released this morning (Wednesday)The figures reveal that there has been a dramatic rise in the levels of illicit and non-Irish duty paid roll your own tobacco products in the last year, along with no decrease in levels of illicit/non-Irish duty paid cigarettes.

    RAS continues to commend Revenue on the work they are doing – this year 5,339 seizures of illicit tobacco products worth €42.3 million took place. However, it is clear that there are not enough resources available to Revenue and An Garda Siochána to tackle the severity of the situation. Of the 5,339, only 16 charges were made for smuggling and 58 for selling illicit products.

    RAS spokesperson Benny Gilsenan said “Revenue work hard, but it’s becoming clear that criminals are working harder to get these products into our country. Every year RAS express our concern over the growing levels of illicit products, and every year it seems to fall on deaf ears. 67 million illicit cigarettes were seized last year, but 453 million went on to be sold illegally. The numbers are staggering.”

    Most staggering are the levels of illicit and non-Irish duty paid roll your own tobacco products on the Irish market. The number of illicit packs has jumped from 15% in 2017, to 21% in 2018. The number of non-Irish duty paid also rose from 4% to 7%. Last year RAS repeatedly voiced major concerns about the impact of the introduction of a 30g minimum roll your own pouch size in May 2017. RAS also raised concerns over raising excise duty on these pouches.

    Mr Gilsenan concluded: “RAS is calling for immediate action and proper enforcement of the current legislation to ensure those who sell illicit products are met with the full force of the law. Retailers nationwide have paid all the relevant duties and taxes and are missing out on revenue and footfall as a result. Illicit tobacco funds criminal groups and only serves to damage legitimate and responsible retailers. We are asking Minister Donohoe not to raise excise on tobacco products, in Budget 2020 until this situation is under control.”

    Revenue’s full report can be found here

  • Retailers and the Exchequer suffer as over 742 million cigarettes bought illegally or brought from overseas

    27 April 2017

    The Revenue 2016 Annual report shows more resources are needed to tackle tobacco and alcohol smuggling:

    • In 2016, 10% of the cigarettes in Ireland were illegal, while 8% were non-Irish duty paid (NIDP)
    • This means that 742 million cigarettes in 2016 were not purchased from registered and legitimate retailers in Ireland.
    • Additionally, 9% of Roll Your Own (RYO) tobacco was illegal, with 3% NIDP.

    Retailers Against Smuggling (RAS) welcome the publication of Revenue’s Annual Report 2016 and Ipsos MRBI Illegal Tobacco Products Retailers Against Smuggling Research Surveys 2016, in particular the inclusion of Roll Your Own (RYO) tobacco figures ahead of the introduction of a 30g minimum pack size on 20 May this year. RAS now call for the Government to provide more resources to combat smuggling, particularly due to the uncertainty caused by Brexit.

    Small and medium-sized retailers’ trade is being undercut by smugglers, and the Revenue report reiterates the depth of the involvement of criminal gangs in smuggling of illicit tobacco in particular. RAS have repeatedly voiced their concerns about the impact of the introduction of a 30g minimum RYO pouch size on 20 May. This will mean the vast majority of RYO consumers face large ‘out of pocket’ spending increases, some as high as 300%.

    RAS spokesperson, Benny Gilsenan, commented: “Revenue’s statistics show once again that Ireland still has a huge problem with the illicit trade, which harms small retailers and strengthens criminal gangs. Only yesterday, RTE ‘Liveline’ broadcast a piece on adolescents advertising cheap, illegal cigarettes in Meath. These activities put retailers out of pocket and are happening because of a lack of awareness of the impact smuggling has on retailers, as well as a paucity of investment in combatting it,” Mr Gilsenan remarked.

    Alcohol

    The figures also highlight the shocking disparity between alcohol seizures and summary convictions: there were 1,875 seizures of illicit alcohol in 2016, but only four summary convictions. RAS call for proper enforcement of the current legislation to ensure those who sell illegal alcohol are met with the full force of the law. Retailers nationwide have paid all the relevant duties and taxes, and are missing out on revenue and footfall as a result.

    “At a time when retailers are facing an increasingly uncertain future with the looming spectre of Brexit, the Government have a responsibility to protect retailers and Ireland’s communities from this prevalent criminal activity.” Gilsenan continued.

    “RAS support Fianna Fáil TD Declan Breathnach’s Sale of Illicit Goods Bill, tabled in March. But it is clear to retailers that the Government needs to step up and protect small retailers before Ireland’s recovery is further threatened.”