Mr. Chris Macey:

The Irish Heart Foundation calls for an annual tobacco tax escalator, at least 5% above inflation, in tandem with a national anti-smuggling strategy. This would bring an extra 60 cent tax to a packet of cigarettes this year. We stress that the smuggling rate is not the 30% plus claimed by the tobacco industry in its front groups. The real rate is provided through Ipsos MRBI research for the Revenue Commissioners and last year the smuggling rate fell to 13% from 15% in 2011. This is still unacceptable. If high tax fuels smuggling, this has not been the experience in the UK, where the smuggling rate has fallen from 21% to 9% in the past decade, while tax increased by 77%, making UK cigarettes dearer than ours.
In Ireland, tobacco companies and their funded groups criticise tax increases, but over the past decade the rate of industry increases has been higher. We propose the tax escalator because regular high tax increases have been shown the world over always to reduce smoking rates, particularly among children.

That is a fact endorsed by organisations such as the WHO and the World Bank.

In tackling smuggling, it is important to note that the Revenue Commissioners estimates that 87% of smuggled tobacco is the product of the legal industry and just 6% is counterfeit, suggesting that supply chains are a key issue here. In the past, cheap tobacco jurisdictions have been knowingly flooded with cigarettes which are then smuggled into other European countries. Andorra is just one example. It was supplied with 3.1 billion packets of cigarettes in a single year by the official tobacco industry, equivalent to every Andorran smoking seven packets of cigarettes every day. Many of these cigarettes ended up in Ireland. We need extra detection equipment such as scanners in our ports, as well as extra manpower, given that Customs lost 600 staff in the three years to January 2012. We also need supply chain controls, including multi-million-euro fines for legal companies whose products are smuggled.

In addition to tackling supply-----