Traceability key to clamping down on counterfeit cigarettes trade

The 5.5m cigarettes seized by Revenue officials at Dublin Port on Wednesday, Novemnber 25. 

Investing in tax stamp and traceability programmes will help countries, including Ireland, curb the counterfeit cigarette industry, which generates upwards of €40bn by flooding nations with cigarettes made with cheaper but far more harmful ingredients.

That is according to the International Tax Stamp Association, which claims the Covid-19 pandemic has provided cover for counterfeiters and smugglers to trade in illicit tobacco.

According to a World Bank report on illicit tobacco, low- and middle-income countries bear the brunt of cheaper tobacco imports, with 80% of premature deaths happening due to smoking.

Counterfeit cigarettes can often be laced with arsenic, pesticides, and rat poison, and contain higher levels of harmful ingredients such as benzene, heavy metals, and tars, health experts say.

Revenue this week seized over 5.5m cigarettes at Dublin Port that were labelled as ‘solar panels’ in the smuggling process, and were discovered following a search of a trailer that arrived on a vessel from Rotterdam.

The 'Rothmans'-branded cigarettes originated from Ukraine and have an estimated retail value of €2.9m, representing a potential loss to the exchequer of €2.5m, Revenue said.

Earlier this month, Revenue officers seized 3.45m cigarettes, also at Dublin Port. The smuggled cigarettes were discovered in 10 large metal boxes, concealed within timber frames, again on a trailer that had arrived on a vessel from Rotterdam.

The 'Winston'-branded cigarettes were valued at over €2.4m, and a tax loss of €1.89m, Revenue said.

Covid-19 restrictions led to a spike in cigarette seizures in the first half of the year, according to lobby group Retailers Against Smuggling.

Analysis of Revenue’s seizures by the group found an almost fivefold increase in cigarettes seized, from 6.6m in the first half of 2019, compared to 31.2m this year.

Proper stamping and traceability are the way to defeat the practice, the International Tax Stamp Association said.

The trade in fake tobacco is worth between $40bn and $50bn annually worldwide, according to a 2020 World Bank report, and churns out more than 600bn fake cigarettes, the association said.

Properly implemented tax stamp and traceability programmes can help governments protect and recoup much-needed revenues to get public finances back on track in the wake of Covid-19, the association added.