‘Price to blame’ as seizures of illegal cigarettes soar

Customs report major rise in seizures of contraband tobacco

‘Price to blame’ as seizures of illegal cigarettes soar

Customs officers have reported major increases in illegal tobacco seizures after confiscating 53m contraband cigarettes and 9,836kg of roll-your-own tobacco worth nearly €30m last year.

The number of cigarettes seized was considerably up on the 40.8m confiscated in 2013. There was also a notable increase in roll-your-own tobacco seizures, which accounted for 4,203kg in 2013.

Ireland has the highest tobacco prices in the eurozone, with 80% of the cost of every packet of cigarettes sold going to the exchequer.

Last October, despite warnings that increasing the tax on cigarettes would lead to more smuggling, Minister for Finance Michael Noonan slapped a further 40c on a packet of 20.

According to Igor Dzaja, general manager of Japanese Tobacco International (JTI), the biggest tobacco seller in Ireland, the high cost of legitimate products “has created an environment where organised crime gangs can generate huge profits at little risk”.

Mr Dzaja said his company “applauds the tireless work of the Revenue Commissioners and supports them in their efforts”, but sudden and steep tobacco tax hikes influence consumers’ choices, leading them to buy cheap, illegal tobacco.

“Such increases are warmly welcomed by cigarette smugglers who already see Ireland as a lucrative target,” Mr Dzaja said.

Garda sources have indicated that major organised crime gangs and subversives are getting increasingly involved in tobacco smuggling because vast profits can be made and if caught the penalties are paltry compared to importing drugs.

JTI, which markets brands such as Benson & Hedges, Silk Cut, Camel, and Amber Leaf, believes that one-in-four of all cigarettes consumed in Ireland avoid tax, with the exchequer estimated to be losing €240m annually.

Mr Dzaja has estimated retailers lose a staggering €450m a year on tobacco and additional purchases due to the illegal trade.

He said there is a significant black market in Ireland for ‘illegal whites’ and they accounted for over 60% of all cigarettes seized in 2013.

“These illegal whites are cigarettes that are manufactured by small indigenous tobacco companies legitimately operating in their own countries and have absolutely no connection to any of the tobacco companies that legally supply tobacco products in Ireland. Some of the most commonly seized illegal white products include D&B and Gold Classic,” he said.

The market is lucrative for smugglers who can acquire a legitimate pack of Marlboro for as little as €1 in Belarus, Kazakhstan and Moldova. It’s believed they’re also getting cigarettes manufactured even cheaper in China, but many of these could contain extremely dangerous impurities.

“The illegal tobacco trade circumvents one of the key objectives of public health policy ie preventing minors’ access to tobacco,” Mr Dzaja said.

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