Proper deterrent missing in black market tobacco battle
THE STATE imposed fines of €250,000 arising from illegal tobacco sales and smuggling last year, according to Revenue figures.
The annual loss to the exchequer from black market cigarettes is about 1,000 times the amount imposed in fines.
In 2011 a total of 102 convictions for cigarette smuggling led to €136,300 in fines and 31 custodial sentences, 21 of which were suspended. The longest of the 10 sentences which were served was 12 months.
A total of 57 convictions relating to the illegal sale of cigarettes resulted in €115,850 in fines and 14 custodial sentences, seven of which were served, the longest of which was three years, with one year suspended.
Benny Gilsenan of Retailers Against Smuggling, a retailers’ organisation which has 3,000 members across Ireland, said the level of convictions relating to illegal tobacco was “not nearly adequate enough” given that the Revenue Commissioners estimate that the cost to the exchequer in lost revenue through counterfeit cigarette sales stood at €250 million in 2010.
“Considering the level of illegal cigarettes that are being sold throughout the country that is a very small proportion of those who are being caught and fined,” Mr Gilsenan said.
Last week the Oireachtas Committee on Finance heard that at least 700 jobs were lost in the Irish retail sector last year because of the black market trade in illegal cigarettes, which retailers claim cost them €575 million in 2010.
Mr Gilsenan said retailers are affected by sellers who are distributing leaflets door-to-door advertising cigarettes for sale at a cost of €3.20 per pack compared to €9.10 which retailers sell at.
Retailers Against Smuggling has called for a minimum €10,000 fine to be imposed on those caught selling or smuggling cigarettes.
Although the Finance Act was amended in 2010 to increase the maximum fine to €126,970 the Irish Tobacco Manufacturers’ Advisory Committee, comprised of PJ Carroll Company, JTI Ireland and John Player Sons, says that the maximum fines are not being applied.
“International crime gangs have been smuggling illegal cigarettes into Ireland for several years now but it’s the lack of deterrents that now means low-level criminals can get in on the action, smuggling small quantities through ports and airports, knowing that even if they are caught they will face a paltry fine compared to the profits they are reaping,” a spokesman for ITMAC said.
The 2011 Europol Organised Threat Assessment Report identified Ireland as one of the preferred destinations for cigarette smuggling due to comparatively high taxes on tobacco here.