Illegal tobacco market hits PJ Carroll profits

The growing popularity of the illicit cigarette trade put a further dent in the profits of cigarette manufacturer PJ Carroll here last year.

New figures show that pre-tax profits last year decreased by 27.5% to €6m.

This followed gross revenues declining by 7.5% from €253.4m to €234.82m in the 12 months to the end of December .

The firm’s revenues – net of government taxes of €203.4m last year – declined by 5.7% from €33.17m to €31.33m.

The directors state that the decline in revenues “was driven primarily by volume reductions as a result of market contraction in the legitimate market.

“We estimate that the illicit market has grown to 29% (up 1% on 2012) based on Eurobarometer independent sources and pack picks in market”.

The directors added that there has been an accelerated decline in legitimate cigarette sales, and a growth of Roll Your Own (RYO) volume by more than 14% and increasing consumers turning to the black market for their tobacco products as they adjust their behaviour.

The downturn in business for PJ Carroll last year coincided with the numbers employed by the firm here reducing from 43 to 35 with redundancy costs last year totalling €2.28m.