16 June 2016
Statistics published by Eurostat yesterday show that Ireland is the second most expensive country in Europe for tobacco and first for alcohol. This breaks down to 189% of the European average for tobacco products and 175% for alcohol.
The Illicit Trade 2015-2016 Implications for the Irish economy report published recently by Grant Thornton highlighted that the key driver for the illicit trade of cigarettes and tobacco products is the increasing level of excise tax. Retailers Against Smuggling Spokesperson and retailer Benny Gilsenan commented “increasing excise creates a very viable and extremely profitable business for criminals to sell illegal cigarettes for €3-4 on the streets. This not only leaves the Exchequer at a loss of over €240 million per annum, it directly impacts legitimate, tax and license paying businesses”.
“Due to the excise increase, we have now reached a stage where the price of legitimate products is over double that of smuggled cigarettes. For most consumers, that’s a no-brainer and they will choose the cheap, illegal products,” Mr. Gilsenan said.
The Grant Thornton concluded that excise increases result in lower priced illicit alcohol products being more attractive for consumers. Mr Gilsenan noted that “when products such as alcohol are as expensive as they are now in Ireland, consumers turn to distilling their own or buying counterfeit alcohol which is incredibly dangerous”.
Mr. Gilsenan continued, “The month of June alone has seen Irish Revenue seize over 8.6 million illicit cigarettes which is over 8 million more than in June 2015 and following the hike in prices in October 2015 budget, I would seriously question the effectiveness of increasing excise tax. As it stands 12% of the cigarettes on the Irish market are illegal. If the Government continues to increase excise on cigarettes and alcohol, you will see more small stores closing and eventually criminals taking over the market completely” stated Benny.