Illegal cigarette smuggling must be stemmed
Illegal cigarette smuggling has become a real threat to the retail trade. The government needs to introduce suitable penalties before more businesses hit the wall.
Print14 February 2011
The illegal cigarette trade is booming across the country and criminals are making hay, while shopkeepers pay the ultimate price. A criminal gang can make €1.3 million per container of illegal cigarettes smuggled into the country and research has shown that gangs in Ireland are making approximately €3 million per week on illegal cigarettes. For retailers this is proving to be a dagger to the heart of their business.
Retailers Against Smuggling (RAS) is the representative group for Ireland’s tobacco retailers with 3,000 members. Their spokesman William Hanley sees no end in sight unless the government begins to act in a coordinated fashion. “We are licensed to sell a legal product but are severely disadvantaged by major national and international criminals that are trading openly on our streets. Our industry lost €758 million in lost tobacco sales to the black market in 2010 and this cannot continue to occur without serious consequences for the sector.
Lure of the black market
“People are naturally going to turn to the lure of the cheaper and unregulated black market. Unless the government and gardaí develop a comprehensive strategy that will once and for all target smugglers, then Ireland’s retailers will continue to suffer. We would appeal to retailers to do their bit and that if they see selling or are aware of smuggling then report it to RAS or gardaí, and with an election pending we call on retailers to make this an issue for their local TDs,” Hanley went on to say.
While the key stakeholders are watching on the smugglers continue to evolve. With one scanner based at Dublin port and the second scanner based on the Eastern seaboard, there has been an increase in illegal cigarettes coming through Cork and the south, which is relatively unprotected. From April to September last year 25 million cigarettes were seized in Cork. It is widely accepted that for every one seizure Customs make, nine get through.
No one dealing with issue
The scale of the problem has been acknowledged by all the key parties but as of yet there has been no movement to establish an interdepartmental committee to deal with the issue. Brian Lenihan, Minister for Finance, recently spoke on the issue at an international smuggling conference in Dublin. He said: “10 billion euro is lost to the national and community budgets of the 27 EU member states each year due to the smuggling of both genuine and counterfeit cigarettes”.
“It is widely accepted that the high level of taxation in Ireland and the high prices which result make us an attractive target for smugglers. It is worthwhile for smugglers to produce for the Irish market despite its comparatively small size”. Minister Lenihan left no grey area for where the responsibility stands to combat the issue. “It falls to governments and their agencies to implement rules and regulations for the protection of society and to facilitate legitimate trade.”
The recent Prime Time exposé on the illegal cigarette trade in Ireland has highlighted the problem to a wider audience, but despite the acknowledgement by a range of stakeholders from An Garda Síochána and the government to health groups such as the Irish Heart Foundation and the Irish Cancer Society, there has been no definitive action.
Gardaí and courts not doing enough
Arrests are being made by gardaí and seizures are being carried out by customs officers, but when the cases reach the courts it becomes clear the reason why the black market is thriving. The average fine for someone caught selling illegal cigarettes in the latest figures from the revenue commissioners is just €2,820. This could be the equivalent of a good day’s work for an illegal cigarette seller.
A coordinated approach is needed and is something that the Irish Tobacco Manufacturers Advisory Committee (ITMAC) has been appealing for. They have continually commended the excellent work of Customs and Excise but realise that without the assistance of the government there is only so much they can do. Their philosophy is simple; less illegal cigarettes means less crime and more money for the Irish exchequer.
A spokesperson for ITMAC said; “This problem affects a range of government departments including finance, justice, health and enterprise trade and employment. Every department has acknowledged the issue but the government has yet to make substantial and coordinated moves to tackle the issue. The judiciary has the power to punish these criminals but so far the sentences and fines have nowhere near matched the crime. Bigger fines and more prison sentences for these criminals will make a difference. When you couple the lack of strategy with a lack of deterrents for criminals who are caught smuggling and selling then criminal gangs will continue to grow and thrive on the streets and the Irish economy’s big black hole from the illegal cigarette trade will continue to grow.”
Until the government decides to stop ignoring the €500 million elephant in the room and coordinate an interdepartmental strategy then there will continue to be an increase in the illegal cigarette trade, a growth in crime and retailers across the country will continue to shut up shop, permanently.
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