High prices lead to hike in cigarette smuggling

By Ann Cahill Europe Correspondent

Friday, July 10, 2009

CIGARETTE smuggling is becoming a very serious problem in Ireland because a combination of the highest price in the European Union and the economic downturn is making it very attractive to smugglers.

Dave Godwin, head of the Customs Criminal Investigations in Dublin, said that with the price of a cigarette packet now about €8.45 and the tax and duties accounting for €6.63 of that, the market was lucrative for smugglers.

"We are even seeing counterfeit John Player Blue, a brand almost uniquely confined to Dublin. They are going to the trouble of replicating in good quality the packaging and the Irish tax stamp," said Mr Godwin.

There is a price difference of about €1.65 for a pack of 20 cigarettes between the Republic and the North.

He said in an economic downturn people are more anxious to avoid indirect taxes such as excise duty and tobacco and liquor. There were also incidents of counterfeit Smirnoff Vodka on the market with alcohol of questionable quality, he said.

Ireland’s success against cigarette smuggling from Singapore was singled out in the annual report from the European anti-fraud office, OLAF.

Releasing their annual report in Brussels yesterday OLAF director general, Franz-Hermann Bruner said, "Our co-operation with the Office of the Revenue Commissioners is very positive. In 2008 we were particularly successful in a case against cigarette smugglers operating via Singapore."

Some 30 million cigarettes in four 40ft containers worth about €11m arrived at Dublin Port last year via La Havre having come originally from Singapore.

They were tracked moving over and back across the border of the North as the gang of smugglers tried to fool customs and evade excise duty before the cigarettes were seized and a number of people arrested.

Dave Godwin, head of the Customs Criminal Investigations in Dublin, said they have a long-standing tradition of cooperating with OLAF and worked closely with them on the Singapore operation and a number of others.

Bigger EU member states have liaison officers in various countries but smaller countries like Ireland rely heavily on Olaf for assistance in such cases. As a result of their help, a small Irish customs team went to Singapore to establish contacts.

This story appeared in the printed version of the Irish Examiner Friday, July 10, 2009