RAS Blog

Tag: Minister for Finance

  • Retailers concern over tobacco excise increase ignored in Budget 2023

    Retailers concern over tobacco excise increase ignored in Budget 2023

    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 welcomes cigarette seizure at Rosslare Europort

    Retailers Against Smuggling welcomes cigarette seizure at Rosslare Europort

    Retailers Against Smuggling (RAS) has welcomed Tuesday’s seizure by Revenue of 3,300,000 million cigarettes at Rosslare Europort with an estimated retail value of €2,400,000 representing a potential loss to the exchequer of €1,900,000. This brings the total quantity of seized illicit cigarettes reported by Revenue to over 40,000,000 so far this year pointing to a rapidly growing black market in Ireland.

    Considering this latest major seizure, retailers are reiterating their call to Minister for Finance Paschal Donohoe TD not to include a further excise increase on tobacco products in next week’s Budget 2022 announcement. Additional excise increases will only serve to further incentivise consumers to purchase from the black market fuelling further growth in smuggling activity, which continues to impact registered and legitimate tobacco retailers whose legal cigarette trade can account for 20 – 30 per cent of their business.

    RAS commends the ongoing work by Revenue officials in the fight against smuggling, particularly at our major points of entry through ports and airports.

  • 13.5 tonnes of raw tobacco seized points to large-scale illegal cigarette manufacturing

    13.5 tonnes of raw tobacco seized points to large-scale illegal cigarette manufacturing

    Retailers Against Smuggling (RAS) has warned that 13.5 tonnes of loose raw tobacco seized by Revenue so far this year indicates the likelihood of large-scale illegal cigarette factories operating on the island of Ireland. To date Revenue has announced four major seizures of loose raw tobacco with a combined estimated retail value of €8.1 million representing a potential loss to the Exchequer of €6.7m.

    Commenting, RAS national spokesperson, Benny Gilsenan said: “The significant volume of the consignments being seized, and the elaborate means being used to conceal this raw tobacco suggests that it’s unlikely the product is intended for direct resale to the consumer on the black market. The recent spike in these types of seizures has risen suspicion among legitimate retailers that the intended destination is likely to be illegal cigarette making factories operated by criminal gangs in either the Republic of Ireland or Northern Ireland.

    “In 2018, Gardaí and Revenue officials uncovered the first illegal commercial-scale cigarette production plant found in the State in Jenkinstown Co. Louth, which was capable of producing up to 250,000 cigarettes per hour. During that raid up to 66 tonnes of raw tobacco were seized which gives us sense of the volume of tobacco product required to run such an operation. The fear among retailers is that the volumes of raw tobacco now being seized at Irish ports are at a level which indicates that similar underground facilities are operational on the island of Ireland. For example, we know that roughly 13-15 million cigarettes could be produced from the 13.5 tonnes of raw tobacco seized alone, and we suspect further large volumes are getting into the country undetected.”

    Mr Gilsenan added: “Since the Jenkinstown raid several other illegal factories have been uncovered, primarily around the border regions, which suggests a link to illegal cross-border trade and criminal activity. The most recent seizure of an illegal factory on the island was in Armagh in July this year, which could produce 390 million cigarettes a year. While we fully commend and support the work of Revenue and An Garda Siochána as well as their counterparts in Northern Ireland in detecting smuggled tobacco and cigarettes, we believe more can be done by policymakers to tackle the growing illegal trade in tobacco products in Ireland.”

    In its recent Pre-Budget 2022 submission to Minister for Finance, Paschal Donohoe TD, RAS highlighted how continuous excise increases on tobacco are fuelling demand for a growing black market. This is resulting in increased levels of smuggling activity, impacting registered and legitimate retailers who face unfair ‘competition’.

    “The operation of illegal cigarette factories is just one challenge facing the retail sector. We are also very concerned by the additional spate of illicit cigarette and roll your own (RYO) tobacco seizures by Revenue so far this year. To date over 35 million cigarettes and over 20 tonnes of RYO tobacco have been seized highlighting just how active the black market currently is. The combined estimated retail value of all seizures this year amounts to over €45 million, close to €8 million more than the total for 2020.

    “We are calling on Government to consider the impact this increased rate of smuggling is having on retailers. The continued growth of the black market can only be halted by stopping the continuous excise increases on cigarette and tobacco products, the retail price of which is 121 per cent above the EU average according to a new Eurostat survey issued today”, Mr Gilsenan concluded.

  • 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