Mr. Chris Macey:

The tobacco industry is being allowed make extraordinary profits in Ireland, substantially more than in other European countries, even though it creates no jobs and costs the health service far more than the State receives in tobacco tax. Traditionally, we focused on taxing smokers and today we are also asking for the committee to support our recommendation for excessive tobacco industry profits, some of which are being used to manipulate national health policy, to be transferred to the Exchequer. Part of this revenue should be used to help smokers quit smoking.

In Ireland, the Government has been taking approximately 79% of the price of a packet of cigarettes in tax. The rest goes to the tobacco industry. In the UK, the rate has been 90%, leaving the industry there with a much smaller profit margin. In monetary terms, the tobacco industry has been earning approximately €1 per pack more in Ireland than in the UK. We estimate that by increasing the rate to 90%, the State could secure €150 million a year more, not from smokers' pockets but from industry profits, making them pay more for the damage done by smoking.

Every year, the tobacco industry increases the price of cigarettes, regardless of whether the tax increases. This means its profit margin gets bigger and it is virtually unnoticed by the smokers, who think all of the increases are caused by tax hikes. Between 2000 and 2010, for example, tobacco companies increased their prices by 83% compared with tax increases of 78%.

The industry uses a sizeable proportion of its extra profit to pay lobbyists and public relations firms which come to places like Leinster House to claim that higher tax increases smuggling. The industry follows this up by increasing its prices. If the tobacco industry genuinely thought or cared that tax increases fuelled smuggling, why would it have increased the price of cigarettes every year for the past ten years? The truth is this is a duplicitous industry that cares only about profit and then uses these profits to undermine State tobacco control policy and regulations.

In our pre-budget submission, we recommend that Government appoints a regulator who would determine a profit level for the tobacco industry that is more in line with other consumer products and with the levels of other countries. This simple initiative, which has worked effectively for other industries, would mean the tobacco manufacturers would have less money to invest in marketing, PR and lobbying aimed at disrupting the State's efforts to reduce the smoking rate.

Smoking is one of the greatest public health challenges of our time. We must do what we can in order that the tobacco industry does not profit from tobacco sales while the State and the individual are left to pick up the bill in financial and human terms. Last year the State took in €1.36 billion in tobacco tax, but the Department of Health states that at current smoking rates, tobacco related illness will cost the State €23 billion in the next ten years. This means the taxpayer is subsidising the tobacco industry, which does not create any jobs or make any meaningful contribution to society, to the tune of €1 billion a year.

Traditional methods of tackling the power of the tobacco industry are not working and we need a new approach. We know that tobacco companies do not care about their products that kill and maim people. By reducing their profits, we can hit them where it will hurt them most and also increase Government revenue at this time of greatest need.

Mr. McCormack from the Irish Cancer Society will finish our submission.