Illegal cigarettes cost the state €264m in a year

13% of all packs consumed by Irish smokers last year were classified as illegal. File picture.

More than one in eight of all packets of cigarettes used by smokers in Ireland last year were illegal, with a sharp increase in the number of counterfeit products being sold.

The latest survey commissioned by Revenue to assess the scale of illicit tobacco products found 13% of all packs consumed by Irish smokers last year were classified as illegal.

It also estimated that 7% of all illegal cigarettes were counterfeit brands – the highest ever level since such surveys began in 2009.

The tax authorities have estimated the potential loss of revenue to the Exchequer from the sale of 22.7 million illegal cigarettes is around €264 million.

The potential tax receipts lost due to the trade of illegal tobacco products last year rose by 9% - or €22m.

Worryingly, the research found that 7% of all illegal cigarettes last year were classified as counterfeit products whereby they were manufactured without the authorisation of the rightful brand owners.

Revenue said such products were designed “to deceive consumers and to avoid paying duty.” 

The vast majority of illegal cigarettes – almost 9 in every 10 packs – are classified as contraband products which have been smuggled into the Republic without duty being paid to the tax authorities.

The report also found 4% of all illegal cigarettes consumed last year were “illegal whites” – cigarettes manufactured for the sole purpose of being smuggled into and sold illegally here.

In addition to illegal tobacco products, a further 8% of cigarette packs were found to be legal but “non-Irish duty paid”, representing a further loss to the Exchequer.

The latest figures show over 6,500 seizures of illicit tobacco products were made by the authorities in Ireland last year at a value of over €67m. File picture.

They represent legal cross-border purchases of cigarettes.

The survey also found that 13% of all roll-your-own tobacco packs used by Irish smokers last year were illegal – up from 12% in 2019.

Revenue said the overall findings of the latest survey suggest the numbers of both illegal and legal, non-Irish duty paid tobacco products “remain relatively stable.” 

The level of illegal cigarettes reached its peak in 2009 when they constituted 16% of all packs in the Republic with an estimated loss of €285m in foregone excise and VAT.

The latest figures show over 6,500 seizures of illicit tobacco products were made by the authorities in Ireland last year at a value of over €67m.

They included 60.7 million cigarettes worth an estimated €43.5 million – up 26% on seizures recorded in 2020.

A joint investigation between Revenue and the UK Revenue and Customs authorities last year identified a major smuggling route between Germany and Ireland for illicit tobacco products which resulted in the seizure of over 1.5 million cigarettes at a business premises in Newcastle, Co Dublin.

A total of 38,246kg of tobacco seized during 2021 valued at €24.1 million represented a five-fold increase on the previous year.

In 2018, Revenue and Customs officials uncovered the first-ever, illegal cigarette manufacturing plant in the Republic when a factory capable of producing 250,000 cigarettes per hour was uncovered in a barn in Jenkinstown, Co Louth.