Ireland - no increase in excise duty on tobacco products worry about smuggling..

April 15, 2010 - Cigarette smuggling (illegal, illicit, black market, contraband) cost the Government 556 million euro (755 million USD) in lost taxes and duty last year (2009), it has been revealed.

Retailers also wrote off 692 million euro (939.4 million USD) in lost sales due to the lucrative illegal trade, although nine shops are being investigated by customs officers for selling counterfeit brands.

A review by cigarette giant Japan Tobacco International (JTI) found customs seized 218.5 million cigarettes last year, valued at just over 92 million euro (124.9 million USD). (Japan Tobacco acquired British based Gallaher Group in April, 2007..)

Finance Minister Brian Lenihan said he did not increase excise on cigarettes in the December budget fearing the already high price - around 8.45 euro for a pack of 20 - could contribute further to the smuggling problem. "The tobacco industry itself has a crucial contribution to make in dealing with the threats posed by smuggling. I did not increase the excise duty on tobacco products in my December Budget as I believe the high price is contributing to increased cigarette smuggling."

"Tobacco smuggling is a serious problem for Ireland. It deprives the state of the revenues from the sale of legitimate products, and is damaging to both the tobacco industry and the retail trade," the minister said.

JTI said the most common platforms for selling illegal cigarettes were unlicensed street markets and door-to-door sales, with even bread vans and a postman reported to be engaged in the trade in 2009. But the study reveals an upsurge in the number of legitimate shops trading in counterfeit goods, with nine retailers being investigated by customs last year.

JTI said it is taking a zero tolerance approach to such behaviour and took the "unprecedented" decision to cease trading with a shop in the midlands believed to be selling counterfeit Benson & Hedges Gold Kingsize. Cease and desist letters were also sent to three other shops thought to be dabbling in the trade.

JTI warned inadequate penalties, low fines, and unregulated street markets continued to make the illicit trade of tobacco a common choice for criminals in Ireland. It said there was a growing link between the trade and hard-core criminality. (Ireland - modest penalty for cigarette smuggling..)

We all await the World Health Organization's (WHO) solution to the problem of tobacco product smuggling faced by countries throughout the world..

VIDEO: Story of a guy who smuggles cigarettes from somewhere in eastern Europe to sell in Ireland.. - 2 min 28 sec.

Reference: Tobacco smuggling costing 556m euro, Belfast Telegraph, 4/14/2010.

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