Budget 2027: Retailers claim tax hike on cigarettes will push smokers towards black market

'The more you put up the price here, the more people will look elsewhere.'

Budget 2027 will see the excise tax on cigarettes rise by €1, alongside a 20-cent per ml hike on vape liquid.

A pro rata excise tax will be applied to tobacco products.

The hikes will see the price of a disposable vape rise by about 40 cents, while the price for a packet of 20 cigarettes will breach €20, depending on the brand.

Public health advocates welcomed the changes.

“Cigarette taxation is the most effective intervention in tobacco control. Nothing else equals it,” said Luke Clancy, director general of Tobacco Free Research Institute Ireland.

While celebrating the changes, Mr Clancy also raised concern the reforms were “regressive” and would hurt the pockets of working-class households the most. 

Retailers against Smuggling, a group representing more than 3,000 small and medium retailers, claimed tax hikes would not curb smoking but instead push consumers towards a tobacco black market.

According to a joint 2025 survey from Revenue and the HSE, 28% of the packs held by surveyed smokers were bought outside of Ireland and smuggled in. The survey estimated about 45.9 million illegal cigarettes were consumed in 2025, at a loss of about €648m to the exchequer.

"The more you put up the price here, the more people will look elsewhere," claimed RAS spokesperson Benny Gilsenan.

Mark Murphy, interim director of advocacy at the Irish Heart Foundation, told the Irish Examiner the tobacco black market was a result of supply chain issues and a lack of legal enforcement, as opposed to product pricing.

According to lobbying organisation Respect Vapers, there are about 352,000 vapers and 176,000 ex-smokers in Ireland. The figures stem from Census population records and a Healthy Ireland survey that estimated 8% of the Irish adult population vape.

A spokesperson for vape lobbying group Responsible Vaping Ireland said the excise taxes could discourage the public from using vapes as a means to quit smoking tobacco.

“Small retailers are already under enormous pressure from rising wages, energy bills, licensing fees and the general cost of keeping the doors open. Now the Government is looking to pile another tax increase on top of that,” the spokesperson said.

“We need policies that help adults move away from cigarettes, not policies that make regulated alternatives less accessible and create more opportunities for the black market.”

The spokesperson said the tax hikes would contribute to a proliferation of “rogue sellers” dodging regulations. Both Mr Clancy and Mr Murphy pointed to research on vapes being used by children as a reason to push prices.

No significant measures were taken in the budget to raise the price of alcohol. Instead, €15m was allocated to support rural pubs. Alcohol Action Ireland chief executive Sheila Gilheany labelled the move as “another sop” to the alcohol industry.