Old reliables: 20 cigarettes cost over €10 for first time
Key consumables such as diesel, petrol and alcohol remain unaffected in Budget 2016
There was immediate criticism of the 50 cent extra on packets of cigarettes in Budget 2016 from the National Federation of Retail Newsagents and tobacco companies, with John Player Ireland calling the move a “bonanza for bootleggers”. File photograph: PA Photo
The cost of a pack of cigarettes has risen above €10 for the first time following Tuesday’s budget announcements.
The duty on a pack of 20 cigarettes is being increased by 50 cents, bringing the cost of the most popular brands to €10.50, while a pro-rata increase will apply to other tobacco products.
All price increases apply from midnight.
“The additional revenue will enable the funding of new initiatives in the health sector to support young families with children,” Minister for Finance Michael Noonan said of the measure in his Budget 2016 speech.
He said the move would raise a projected €61.4 million in a full year.
Both the Irish Cancer Society and anti-smoking lobby group Ash Ireland welcomed the price increase.
However, there was immediate criticism of the move from the National Federation of Retail Newsagents (NRFN) and tobacco companies, with John Player Ireland calling the move a “bonanza for bootleggers”.
District president of the NRFN, Dermot Steemers, said Mr Noonan’s claim that the increase would result in a €61.4 million tax benefit was “pure fantasy economics”, adding that continuous increases in cigarette prices over a number of years had given rise to “massive cigarette smuggling”.
“It has been shown year after year that price increases drive smokers out of the shops and into the arms of criminals, where they can buy cigarettes for half the price and will pay no taxes,” he said.
JTI Ireland Ltd, a member of the Japan Tobacco Group, which markets some of Ireland’s most popular tobacco brands, said the move would “exacerbate the illegal tobacco trade”.
“These excessive annual tax hikes continue to create fertile ground for the black market, so rather than raising revenues it is playing into the hands of criminal smugglers,” a spokesman said.
However, Ash Ireland said concerns over price increases fuelling smuggling were “misguided - and mainly fuelled by the tobacco industry”.
“Smuggling must be tackled as a separate and very serious criminal issue, but it should not impinge on health policy,” its chairman Dr Ross Morgan said.
He pointed to a reduction in smoking prevalence over the past 12 years, with current smoking rates at 19.5 per cent, down from 29 per cent in 2003 according to the latest HSE survey .
The Irish Cancer Society welcomed the Government announcement, saying it would act as a disincentive for children to start smoking, and encourage current smokers to quit.
The organisation’s head of advocacy and communications, Kathleen O’Meara, encouraged those who wish to give up smoking to contact 1800 201 203 or to visit quit.ie.
There was no price increase in the budget announcement on diesel or petrol, while alcohol prices, including wine, also remained unaffected.