Price hike on cigarettes could increase smugglers profits

THE price hike on cigarettes will boost the profits of criminals involved in the lucrative trade of cigarette smuggling, it was warned yesterday.

It is also likely smokers will buy more cigarettes while on holiday abroad and bring them back home, thereby denying the State excise and VAT revenue.

“Profit for smugglers has now increased in light of the VAT and excise increase. Each pack is now worth an extra 50c for the smugglers,” said a customs source.

Gangs, many with paramilitary links, who are already earning millions for the illicit trade, can now up their prices to street and local buyers.

Smugglers buy cigarettes where they are cheapest in Europe, like Luxembourg and Belgium, and smuggle them direct to Britain, the most expensive country in the EU for cigarettes, or Ireland, the second most expensive.

“Smugglers will sell here and Britain. The UK is ideal because the profits are greatest, but they will also sell here,” said a customs source.

He said the containers are brought here, into Dublin Port, Rosslare or Co Louth, and then taken to the north, from where they are transported to Britain or back here.

The 50 cent tax hike will bring the average price of a pack of 20 to around €5.70, compared to €2.43 in Belgium.

That means that six million cigarettes purchased in Belgium would cost criminals €729,000 to buy. However, by the time they arrive in Ireland, they will be worth €1.71m, a potential maximum mark up of almost a million.

Moreover, as most of the smuggled cigarettes are in turn shipped to the UK, the smugglers can make even more profit.

A pack of 20 retails for €7.05 in Britain. This means that five million cigarettes would be worth €2,115,000.

Customs and gardaí estimate that cigarette smuggling is now as lucrative as drug trafficking.

“If you take cannabis for example, in a container packed with cannabis, you will almost get the same, if not more, in profits in cigarettes,” said a customs officer.

While most of the smuggled cigarettes end up in the UK, much of it is sold here in local housing estates and some shops.

“There are housing estates where locals know of people who are selling cigarettes on the cheap,” said a customs officer.

But he said that huge interceptions made by customs had reduced that trade in the Republic.

“Because we’ve seized so much, criminals will maximise their profits on containers that do come through, so they sell them in the UK.”

Smokers will now be more financially inclined to buy more cigarettes while holidaying abroad.

There are effectively no set limits for how much they can bring back so long as they can satisfy customs that it’s for their own personal consumption.