Finance Minister Michael Noonan announced a hike of 40c on a packet of 20 cigarettes, while a 25g packet of roll-your-own tobacco will increase by 20c. The changes mean the cost of a pack of cigarettes will break the €10 barrier for the first time.
Almost 80% of the €10 paid for a box of cigarettes goes directly to the State through Vat and excise duty.
Kathleen O’Meara of the Irish Cancer Society welcomed the price hikes, saying higher tobacco prices will act as a disincentive for children to start smoking and will encourage smokers to quit.
“It sends a strong signal to the tobacco industry that the Government is serious about reaching its target of a smoke-free Ireland by 2025. The price hike will encourage people to stop smoking and ultimately save lives,” she said.
Chris Macey of the Irish Heart Foundation said the move is another “significant nail in the coffin of the tobacco industry”.
“The price increase will add to the impact of forthcoming measures such as plain pack legislation by delivering a short, sharp shock that will motivate younger smokers in particular to quit and discourage many more teenagers from starting to smoke in the first place,” he said.
Mr Macey said claims the price hike would lead to an increase in tobacco smuggling held little water.
“The tobacco industry will claim the extra tax will fuel smuggling, but the fact is they’ve been overestimating the illicit trade for years to deter Government from increasing tax and then hiking their own prices. Revenue Commissioners’ research shows the smuggling rate here has fallen from 15% to 11% over the last three years,” he said.
Retailers Against Smuggling spokesman Benny Gilsenan, which represents 3,000 independent retailers across Ireland, rejected this view and said there would be a “surge” in illicit trade on foot of the price hikes.
“This is a real slap in the face for legitimate small businesses that have had to deal with this problem since the recession started and who continued to pay their taxes throughout the bad times. Like it or not, our businesses rely on cigarette sales,” he said.
John Mallon, a spokes-man for smokers’ group Forest Éireann, condemned the move as “daylight robbery”, saying smokers had again been singled out by the Government.