Retailers Against Smuggling (RAS) welcomes the announcement (23.02.23) by Revenue of the major seizure at Dublin Port of approximately 6,000kgs of tobacco and 2,400 cigarettes on the 15th February and 12.3kgs of tobacco on the 20th February, worth a combined estimated retail value of over €4.5 million, showing a potential loss to the Exchequer of over €3.5 million. This is the third seizure so far this month and is yet another first-hand indicator of an exceptionally active black market and the scale of tobacco smuggling in Ireland.
RAS commends the ongoing work by Revenue officials in the fight against smuggling, particularly at our major points of entry through ports and airports. However, the issue of tobacco smuggling remains a huge threat for registered and legitimate tobacco retailers whose legal cigarette trade can account for 20 – 30 per cent of their business.
RAS encourages anyone with information on the sale or supply of illegal cigarettes and tobacco to contact Revenue’s confidential hotline. Free phone number 1800 295 295.
Retailers encouraged to report suspicious trade of illicit cigarettes and tobacco to Revenue
A significant spike in cigarette and tobacco seizures by Revenue in October signals the threat of smuggling activity is stronger than ever for registered and legitimate retailers. That’s according to Retailers Against Smuggling (RAS) who call on business owners and the public to report suspicious trade of illicit cigarettes and tobacco in their locality.
The combined estimated retail value of cigarette and tobacco seizures announced by Revenue and An Garda Síochána so far this month is over €8.1 million.
Commenting, RAS national spokesperson Benny Gilsenan said: “In 2021 the notional loss to the Exchequer on the 22.7 million illegal cigarette packs consumed in Ireland was €264 million according to Revenue. However, retailers are bearing the greatest impact of this as consumers are forced to source cheaper product from the black market for which there is a spiralling growth in demand. Not only are retailers losing out on tobacco sales, but more importantly they are hit by the lost sales of additional products consumers might purchase had they called into store.
“This comes as the retail sector faces a challenging winter ahead to keep stores viable due to soaring energy prices and the general cost of doing business rapidly increasing. At the same time, organised crime gangs are making huge profits from the growth in demand for cheaper tobacco products. We are seeing first-hand how large consignments of illicit cigarettes and tobacco are trickling their way down into communities across Ireland to small time criminals who are often selling to minors.
Mr Gilsenan added: “We encourage business owners and the public to play a role in tackling this criminality, protecting minors, and supporting local retail trade by reporting suspicious activity to Revenue. Information on the ground like this is incredibly valuable to Revenue for building a full picture of illicit tobacco trade in Ireland. This intel ensures Customs Officers can identify the supply lines between small time sellers and the major crime gangs bringing large consignments into the country, leading to the type of major seizures we’ve seen this month.”
Anyone with information on the sale or supply of illegal cigarettes and tobacco can contact Revenue’s confidential hotline. Freephone 1800 925 925.
Retailers Against Smuggling (RAS) has expressed frustration over an excise increase on tobacco which is set to drive further black-market activity as consumers grapple with the soaring cost-of-living. The group was reacting to Budget 2023 announced by the Minister for Finance, Paschal Donohoe TD which included an increase of 50c on the average price of a packet of 20 cigarettes.
Commenting, National Spokesperson for Retailers Against Smuggling, Benny Gilsenan said: “It is extremely disappointing that Minister Donohoe has once again ignored the concerns of legitimate registered retailers on the direct impact black market activity is having on their businesses. Today’s Budget 2023 announcement will inevitably push many consumers to the black market for the first time and makes illicit tobacco an even more lucrative commodity for organised crime gangs.
“We fully expect that the percentage of smuggled tobacco on the Irish market will continue to rise because of the increase, eliminating 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.”
Retailers Against Smuggling (RAS) welcome the seizure of 1.5 million illicit cigarettes at a premises in Co. Meath. The seizure had an estimated retail value of €1.1 million, representing a potential loss to the Exchequer of approximately €919,000.
This latest announcement by Revenue validates retailer concerns of a highly functioning black market which legitimate Irish retailers are forced to compete with. Commenting, national spokesperson for RAS and Dublin based retailer, Benny Gilsenan said, “This seizure of illicit cigarettes indicates that the market is alive and well. As retailers across the country are struggling to adapt to the rising cost of doing business, seizures like this tell us that it is very much business as usual for the organised crime gangs behind smuggled tobacco products.”
RAS commends the ongoing work by Revenue officials in the fight against smuggling. However, the issue of tobacco smuggling remains a huge threat for registered and legitimate tobacco retailers whose legal cigarette trade can account for 20 – 30 per cent of their business.
Retailers Against Smuggling (RAS) welcomes the announcement by Revenue regarding the seizure of 4.3 million cigarettes at Rosslare Europort on Saturday, 29th January. The seizure had an estimated retail value of €3.2m representing a potential loss to the Exchequer of more than €2.5m.
This is the largest cigarette
seizure by Revenue so far this year, following a record-breaking year for large-scale
cigarette and tobacco smuggling in 2021. This latest seizure points to the continuation
of a rapidly growing black market which Irish retailers are forced to compete
with, as sophisticated criminal gangs take advantage of the tidy profits that
can now be made from illicit tobacco.
RAS commends the ongoing
work by Revenue officials in the fight against smuggling, particularly at our
major points of entry through ports and airports. However, the issue of tobacco
smuggling remains a huge threat for registered and legitimate tobacco retailers
whose legal cigarette trade can account for 20 – 30 per cent of their business.
Revenue seized 31.2 million cigarettes during first six
months of 2020 compared to 6.6 million in the same period last year
Retailers Against Smuggling (RAS) have expressed unease over the high number of illegal cigarettes seized by Revenue during the first half of 2020 compared to the same period last year. An analysis of Revenue’s seizures by RAS revealed that there was an almost fivefold increase in cigarettes seized, from 6,659,500 (H1 2019) to 31,202,600 (H1 2020), indicating that Ireland continues to be a target for tobacco smugglers in spite of restrictions on travel.
Commenting,
national spokesperson for RAS and Dublin based retailer, Benny Gilsenan said:
“We commend and fully support the hard work undertaken by Revenue and An Garda Síochána
in the fight against illicit trade. However, the smuggling of tobacco remains a
significant concern to registered and legitimate tobacco retailers across
Ireland, whose legal cigarette trade can account for 20 – 30 per cent of their
business. The fact that over 31 million illegal cigarettes have been
confiscated by Revenue during the first half of this year alone demonstrates
that criminals continue to target Ireland and are adapting their methods in
response to restrictions on personal travel by focusing their efforts on large
consignments of smuggled products. It is just another indicator as to why it is
becoming increasingly hard for legitimate retailers to compete with the black
market.
“It
demonstrates that while current travel restrictions due to COVID-19 have
resulted in low levels of Non-Irish Duty Paid (NIDP) entering the market, it is
clear that criminal enterprises are continuing to seek out ways of ensuring smuggled
products enter the country. We believe that there is still more that
can be done and that is why in our recent pe-budget submission to the Minister
for Finance, RAS called for the detection and seizure of illegal tobacco
products to remain a priority for Irish authorities, with increased awareness
of the elaborate means criminal gangs are utilising to transport these huge volumes.”
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. This represents a potential loss to the Exchequer of
€242 million in 2019 on 24 million illegal cigarette packs.[1] The same Revenue survey
found that 12 per cent of the Roll Your Own tobacco packs held by smokers
surveyed were illegal in 2019.
Mr
Gilsenan added: “The increase in the number of cigarettes seized in 2020
compared to the same period in 2019, and indeed compared to 2019 in total, indicates
that an even greater number of cigarettes could potentially be making its way
to the black market. This increase in the scale of the seizures highlights the
importance of the work by Revenue and An Garda Síochána and the need for a
continued focus on tackling illicit trade by the authorities. This criminality
is directly affecting livelihoods and local retail businesses across the
country who are already facing enormous pressures as a result of COVID-19.”
Retailers
Against Smuggling (RAS) is calling on the next Government to consider further resources
in the detection and prosecution of illegal smuggling of excisable goods. New
figures published by Revenue indicate that a new approach must be explored if we
are going to stem the tide of illegal smuggling and give local legitimate
retailers any chance against the flourishing black market.
The
Revenue’s Annual Report for 2019 illustrated that:
Revenue
seized 3,215 cigarettes and 1,445 other tobacco products, at a total value of €10.52
million, in 2019.
That
is a 75% drop in the seizure of tobacco products since the same period in 2018
(the total value was €41.29 million).
This
is also easily the lowest haul for Revenue since records began in 2013 – the lowest
being in 2017 with a total value of €20.5 million.
RAS
welcomes the Revenue’s acknowledgement that the problem is increasingly hard to
detect, with criminal gangs now using inventive and complex smuggling and
concealment methods. A more collaborative approach in tackling the issue is
needed and RAS will work with Revenue in whatever way possible – for example
greater sharing of information – and play its role in trying to combat the
problem which is effecting livelihoods and local retail businesses across
country.
Reacting to
the publication of these figures, RAS spokesperson and retailer in Dublin Benny
Gilsenan said “We know that the availability of tobacco products on the black
market is widespread and yet we now hear that seizures are down significantly.
It shows that criminal gangs are using whatever means necessary to evade detection
and keep their illegal finances thriving. This needs to serve as a wake-up call
for everybody”.
He added: “The incoming Government needs to take
a fresh look at what can be done to tackle this vital issue. Illegal smuggling
is not only bankrolling criminal gangs and draining resources from the State,
it is crippling legitimate local retailers trying to make a living”.
Retailers Against Smuggling (RAS) along
with CPL Fuels Ireland and Hardware Association Ireland (HAI) met with
representatives from the local Garda Síochána and members of the Monaghan
County Council to highlight their growing concerns with illicit trade of solid
fuels.
Attendees at the
County Monaghan Joint Policing Committee heard about the dire impact on
sellers, distributors and manufacturers due to the levels of illicit solid fuel
trade in the border region, and the industry reiterated its concern over the
Government’s inadequate response to tackling the issue.
RAS Sub-Group member
and CPL Fuels Managing Director Niall McGuinness spoke at the meeting saying “We urgently need greater visible action
from the powers that be in tackling this issue that is ruining people’s
livelihoods, or it will only get worse. Today was a good step forward and shone
a light on the real impact illicit solid fuel trade is having, particularly in
the border region”.
HAI’s Jim Copeland
said “Our members are under extreme
pressure to keep up with the levels of fuel coming over the border. Some of
them have stopped selling fuel all together. A carbon tax increase will put
over 1,200 jobs at risk – something must be done.”
Solid fuel can
represent up to half of some retailers’ turnover, particularly in the Winter
months. The illegal fuel trade is booming in Ireland and the Government must
make it a priority to protect Irish retailers especially in the lead up to
Brexit.
The illicit solid fuel
trade is costing the Exchequer over €9.7 million in lost revenue, which
represents a loss of €36.5 million to retail merchants, putting many local
traders out of business. Different tax approaches in the Republic of Ireland
and in Northern Ireland make a lorry load of coal €2,217 more expensive in the
Republic than in The North. A carbon tax hike in Budget 2020 will make this gap
even larger and encourage smuggling of solid fuel over the border.
RAS, CPL and HAI also
raised the issue of fuel poverty at the meeting. 28% of people in Ireland
experience energy poverty. Those who can afford to buy 1 tonne of untaxed coal
online from Northern Ireland and have it delivered to their homes in the
Republic for personal use do so, while the 28% of citizens experiencing fuel
poverty have no opportunity to do the same. This practice is contributing to
the cost gap between those Irish Citizens experiencing fuel poverty and those
benefitting from the lack of enforcement on fuel coming across the border.
Retailers are at a loss to understand the Government’s decision to impose
another excise increase of 50c in today’s Budget. Retailers Against Smuggling’s
(RAS) National Spokesperson Benny Gilsenan commented on the announcement: “In
the backdrop of a potential no-deal Brexit, the return of a Duty Free regime
between Ireland and the UK and an ever fluctuating Sterling, all of which will
lead to further growth in the illicit trade, tax compliant small and medium
sized retailers are once again penalised while
criminals and Airport Duty Frees reap
the benefits as the cost of tobacco products
increase yet again.”
Retailers Against Smuggling have welcomed a call from the Royal College of Physicians of Ireland for extra funding to be made available for anti-smuggling measures in their Budget 2020 submission published this week. RAS spokesperson Benny Gilsenen said “We agree with the RCPI that additional funding should be made available for anti-smuggling measures. RAS have asked for extra funding for Revenue and the Gardaí year on year. This year is especially important with Brexit due to happen at the end of October and still no deal in place. Government also needs to recognise the significant increase in the illegal trade of Roll Your Own (RYO) tobacco, which has more than doubled in the last two years.” RAS are calling on the government to increase spending on anti-illicit trade measures and to freeze any further excise hikes on tobacco products until the situation is under control.
Note to the editor:
Ipsos MRBI’s Illegal Tobacco Products Research Survey 2018 that there was no decrease in the level of illicit cigarettes in Ireland with the figure for illegal packs remaining at 13%, and non-Irish duty paid (NIDP) at 9%. The survey found that approximately 453 million illegal cigarettes (23 million packs) were consumed in Ireland in 2018, representing a loss to the Exchequer of approximately €211 million.
A growing area of concern for retailers is the illicit trade in Roll Your Own tobacco (RYO) following the introduction of a 30g minimum RYO pack size on 20 May 2017. This new minimum means that the vast majority of RYO consumers face large ‘out of pocket’ spending increases, some as high as 300%, therefore pushing those users to purchase on the illicit market. The Illegal Tobacco Products Research Surveys 2018 found that the number of illicit RYO pouches held by smokers surveyed has more than doubled in the last two years – jumping to 21% from 9% in 2016
