Mr. Gerard Moran:

There was a question about our attitude to a tobacco industry sponsored supply chain or a track and trace system. Public policy on this issue needs to be settled by the various public bodies and Departments concerned. We are not particularly interested, therefore, in engaging with tobacco interests on it. There was a question on whether we had been talking to them. I am aware that they have made offers to us, but we are not inclined to nibble.

A key question, repeated by a number of Deputies and Senators, was related to the suggestion there was an increased risk that counterfeiting would be much easier with standardised packaging. To repeat what I said in my opening statement, we rely on the tax stamp. If they can counterfeit the packages already available, they can counterfeit the others. We do not see a dramatic change in the landscape. What is of primary importance for us is that we have a state-of-the-art tax stamp that is highly resistant to counterfeiting and that the technology include secret features that our scanning devices can identify. That is what we rely on, not whether it is counterfeit. In the future we will also rely on the tax stamp.

I think it was Deputy Mary Mitchell O'Connor who quoted an anonymous Customs and Excise source who said this was playing into the hands of criminals. I do not agree; this follows from the remarks I have just made.

There was a further question about resources. I think I have dealt with that issue. We have sought to maintain the level of resources. I hope I stressed sufficiently in my opening statement that tacking this problem is a serious priority for Revenue. There are two dimensions to it - lost tax revenue which is very significant and the fact that it undermines public policy on smoking in that it results in making product more freely available at a time when pricing is a key instrument in trying to reduce demand.

I thought I was nearly finished, but I still have two pages left. I will go through them quickly.

There was a question on whether there were black spots. The answer is not particularly; that is our take on it. It is a problem across the country. It may be more intense in some places rather than in others, but it is widespread across the country. There might be a socio-economic dimension to the precise availability or degree of saturation in some places compared to others.

There was a question about the spread of resources, whether we were concentrating on the main ports and ignoring the rest of the country. That is definitely not the case. Our compliance staff and enforcement teams that undertake this work are distributed on a regional basis. They are deployed at small ports and airports on a risk assessed basis. All interventions and examinations we conduct are in the first instance on the basis of intelligence or risk profiling. Whenever we have information that suggests some activity is warranted at a particular location, we will do it. We also undertake regular campaigns at street level, some of which are localised and others on a national basis, to target visible activity.

There was a further interesting question from Deputy Peter Fitzpatrick on whether increased prices resulted in increased smuggling. Certainly, they increase the incentives. It means that there is a bigger margin for the traffickers. They can pitch at a price that is well south of the price of legitimate cigarettes and still have a huge margin to make super-normal profits. Undoubtedly, the bigger the price differential, the greater the incentive. It needs to be borne in mind that the price of legitimate cigarettes in some eastern European countries is probably about €2.20 per packet, whereas here the price is €9.50 or €9.60. One can find cheaper cigarettes and the cheapest one will find will be close to €8. The idea would be for prices in these countries to migrate in a northerly direction, but all of these countries tend to face problems with their neighbouring non-EU countries which have even cheaper priced cigarettes. It is, therefore, a difficult problem.

There was a question about plain packaging and the illicit trade and a further question about the figure of €240 million. I answered that question. I am picking up on it again, but it gives me another opportunity to stress that it is a nominal figure. It is useful to flag it, but it is a nominal figure based on unrealistic assumptions. Senator John Crown also covered the issue. People who have money would spend it on something else if they were not spending it on this product.

We were invited to comment on the involvement of tobacco companies in the illicit trade. A number of years ago there was a massive oversupply by the main tobacco companies in places such as Andorra, but the activities of these companies have been brought under control by co-operation agreements that penalise them if their cigarettes are found available illicitly in countries other than those for which they are produced or distributed.

If anyone wants me to come back in on a particular question, I can do that.