Tobacco smuggling blamed on recession and government duty

Reduced income as a result of the recession and high levels of government duty on a 20-pack of cigarettes is driving tobacco smuggling, according to manufacturers.

The profit made by tobacco smugglers can be enormous and the penalties if caught are far less severe than for drugs.

Ireland has the highest price for a packet of 20 premium cigarettes in the EU, with an average price of between €9.30 and €9.50.

Only Norway charges more in western Europe.

According to a review of the illicit tobacco trade carried out by JTI (Japan Tobacco International) — which manufacturers brands such as Benson & Hedges, Silk Cut, Camel, Winston and Amber Leaf — the high cost of Government duty on a 20-pack is driving up smuggling.

JTI spokesman Alec Elliott said 80% of the price goes to the Government in taxes and excise.

The recession, with the result of reduced disposable income, has also fuelled the smuggling trade.

A packet of 20 premium brand cigarettes can cost as little as 92c in Belarus and €1.33 in the Ukraine.

Germany charges nearly half the price of cigarettes on sale in our market.

“Smugglers can be very flexible and will switch [point of entry] if they are stopped,” said a Customs spokesman.

The largest consignments coming into this country are smuggled in through the ports in containers and the cigarettes hidden inside are believed to be manufactured for even less than the Belarus price.

They are also likely to be fakes and packed in reproduced packets of lesser known brands.

What is in them, in the absence of proper quality control mechanisms, could mean they are seriously dangerous to health.

“They mainly come in from China, Malaysia, Vietnam and the [United Arab] Emirates,” said the Customs spokesman.

Cigarettes smuggled in through airports are more likely to come from Poland, Moldova, Russia, and the Canary Islands, and it is not unusual for those carrying them to be ‘mules’ who either come from those countries or have strong connections there.

The increased appetite in Ireland for roll-your-own tobacco hasn’t been lost on the smugglers either.

It is now estimated that 11% of the population now smoke this type of tobacco, which is cheaper than ready-made cigarettes.

A box of legitimate roll-your-own tobacco, with filters and papers, will retail at about €5.30 here and Customs are seizing an increased amount of contraband roll-your-own.

There were 55 convictions for cigarette smuggling in 2013. Some 16 of them got custodial sentences, with the longest term being one year. A further 13 got suspended prison sentences.

Fines totalling €71,000 were also imposed by the courts on many of the 55.

In addition, there were 45 people brought before the courts for selling illegal tobacco products.

They were fined a total of €90,000. Two received very short spells in prison and six got suspended sentences.

Mr Elliott said his organisation had come across leaflets which were being dropped in urban areas detailing price lists and contact numbers for cheap cigarettes, which are obviously either fake or smuggled in without duty and excise payments.

Some 200 John Player Blue or Benson & Hedges can be obtained for as little as €40, or €4 per 20-pack. Meanwhile, 200 Palace or Super Kings are being sold by smugglers for just €30 and they’re offering 50g of Golden Virginia for €8.

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