At least 700 jobs were lost in the Irish retail sector last year because of the black market trade in illegal cigarettes, the Oireachtas Committee on Finance heard today.
Benny Gilsenan of Retailers Against Smuggling, a retailers’ organisation which has 3,000 members across Ireland, said retailers were competing against illegal black market cigarette sales which, at €3.20 a pack cost almost a third of what retailers were legitimately charging.
The group said that about €420 million was lost excise duty and revenue to the State in 2010 while retailers lost out on €575 million in revenue due to illegal cigarette sales in the same time period.
“To us as retailers who are working seven days a week trying to keep the doors open that’s a phenomenal amount of money,” Mr Gilsenan said.
“We’re looking for the law to do its job. The law is not doing its job. We have to comply with the law in our stores. We can’t sell to minors, we have our cigarettes in behind closed doors, yet these people can go out on the street outside my premises and sell openly to a member of the public,” he said, adding that illegal sellers were also distributing door-to-door flyers advertising cheap cigarettes.
Mr Gilsenan said that the group were proposing a minimum fine of €10,000 to deter the trade in illegal cigarette sales: “Unless we get a minimum fine we’re not going to get any curtailment on the sale of [illegal] cigarettes,” he said.
He said that retailers feel the problem will get worse due to the recent VAT and increase hike and that extra tax revenues the Government had hoped to earn will not come to pass as more consumers are pushed towards the illegal trade.
The organisation also called for reform of laws governing the sale of products at markets and fairs, where illegal cigarettes are widely available.
TD Kevin Humphreys said that there had been a commitment by Minister of State Brian Hayes that he would look at bringing in further measures to combat cigarette smuggling in the upcoming Finance Bill, and suggested that the finance committee request an update from the minister in relation to this.
Up until October 2011 the Revenue Commissioners 35 convictions for illegal selling of unstamped tobacco products were secured under the Finance Act with total fines of €76,350 and six custodial sentences, five of which were suspended, imposed.
In the same time period 77 prosecutions for cigarette smuggling were secured with fines of €98,050 and 26 custodial sentences imposed, 19 of which were suspended.