PJ Caroll profits fall amid black market competition

Operating profits at the Irish arm of cigarette firm PJ Carroll fell 20% to €8.4m last year in the face of continuing competition from the black market.

Revenues slipped to €30.28m after “numerous years of decline”.

Gross revenues, which include duty excise and other taxes of €185m, fell 2% to €215.3m in 2015.

The firm faces even higher excise duties on its products following the Government’s decision to increase the price of the pack of 20 by 50c which brings the price of the most popular brands to €11 a pack.

PJ Carroll & Company, a subsidiary of the UK-based British American Tobacco, posted a pre-tax profit of €7.8m after incurring finance costs of €629,000.

The directors say the firm “has been through numerous years of decline” after the “legitimate market” contracted.

“The black market remains a huge challenge facing the business.

“PJ Carroll commends the gardaí and Revenue Commissioners for their continuing efforts in fighting the black market.

“Over the course of 2015, it appears that the black market may have been stabilising,” the directors say.

“However, the black market is still at a very high rate in comparison to other EU countries due to the high prices of tobacco products and the excise introduced in budget 2015 (40c) and in budget 2016 (50c).”

It paid dividends of €4.05m and employs 33 staff. Total staff costs were €1.99m.

The directors add that disposable income continues to remain constrained due to tough economic conditions.

Another risk and uncertainty facing the firm is product liability cases, with two claims advanced against the firm at the end of last year.

The note states the vast majority of the claims have ended.