Spain is biggest market for tobacco purchases, with excise duty on pack of cigarettes about €3 compared to almost €11 in Ireland

The difference between tobacco prices paid in Ireland and those in mainland Europe is fuelling a growth in Irish consumers purchasing tobacco abroad to avoid paying excise duties, according to a retail industry body.

Spain is the biggest market for those purchasing tobacco and bringing it into Ireland (48 per cent), followed by the UK and the Canary Islands, new data has found.

The data comes from polling firm Amárach, but was commissioned by Retailers Against Smuggling (RAS), which represents small and medium-sized retailers who benefit directly from the stability of the legal tobacco industry.

Of the 1,000 Irish adults polled as part of the research, half said they smoked. More than one quarter (28 per cent) said they had purchased tobacco abroad (15 per cent) or in duty-free (21 per cent).

RAS says the figure is growing over time due to the “stark” price gap between Irish tobacco prices and those in Europe.

The excise duty on a packet of cigarettes in Spain is about €3, compared to almost €11 in Ireland, they said. Consequently, the cost of a packet in Ireland is more than double the European average.

In the most recent budget, the price of a packet of 20 cigarettes increased by 50 cent, bringing the price to almost €19.

The retail body said it is concerned the price differential is “fuelling both cross-border purchasing and the growing volume of tobacco products entering Ireland without Irish duty being paid”.

Benny Gilsenan of RAS said smoking rates are “no longer declining at the pace they once were, while the illicit market continues to expand”.

Figures from Revenue indicate that illegal cigarettes now account for more than a quarter of the market, representing an estimated loss to the exchequer of €590 million a year.

The group said the move to duty-free and the illicit trade is undermining the Government tax take and hurting retailers.

It called for stronger enforcement of the new Revenue rules which gave greater powers to address those who attempt to breach the limits on the amount of tobacco product individuals can purchase at duty-free or abroad.

“The new rules introduced last year are welcome, but they must be backed up with visible, targeted enforcement.”

Read our full article in the Irish Times here: Irish smokers buying more tobacco abroad due to ‘stark’ price differences, say retailers – The Irish Times