Brendan Griffin (Kerry South, Fine Gael)

I am grateful for the opportunity to raise this matter, which affects the areas of health and public finances, as well as enterprise because it also affects jobs. Last Wednesday, I hosted a briefing session in the audio-visual room at which representatives from Retailers Against Smuggling, RAS, addressed Oireachtas Members on this important matter. Retailers Against Smuggling is a national group, representing Irish tobacco retailers, which was set up in 2009 to help combat the growing illicit trade in tobacco in Ireland. Its establishment in 2009 indicates this problem is not new but has been extant for quite some time. Moreover, the fact the aforementioned group has 3,000 members also demonstrates this is quite a large problem that is not confined to a small group but is nationwide and growing.

According to Retailers Against Smuggling, based on 2010 figures the illicit trade in tobacco is costing Ireland's retailers €575 million per annum and the Exchequer €460 million from the avoidance of tobacco duty each year. Although budgetary adjustments of between €3.6 billion and €4 billion each year are being contemplated at present, this figure constitutes more than 10% of the amount under discussion. An enormous amount of money is being lost to the Exchequer as a result of tobacco smuggling. Consequently, this problem must be tackled and it will take a multi-departmental approach that must involve the Departments of Justice and Equality; Health; Jobs, Enterprise and Innovation; and Finance.

At present, the maximum fine for cigarette smuggling in Ireland is just over €126,000, but the average fine imposed in the second quarter of 2011 was €1,468. This sums up the current approach to the problem, which is that it is not being taken seriously. A shocking statistic put forward by RAS is that almost one quarter, 23%, of tobacco products consumed in Ireland in 2010 were not duty paid. One in four tobacco products consumed had no duty paid, even though each tobacco product consumed will impose a cost on the taxpayer through the health service. This is not good enough. Last May, Europol reported the reason Ireland in particular was one of the centres in which cigarette smuggling is a major problem is because it has high prices for cigarettes and low penalties. This must be addressed and penalties form the key to the problem.

This problem affects retailers and distributors. It has an effect on local economies, on the national economy and, as I mentioned earlier, on the public finances in particular. Moreover, vulnerable young people under the age of 18 are also victims because they are able to buy cigarettes from those who sell them on the streets. The problem also is that it is not just regular cigarettes that are being sold but counterfeit ones, and God only knows what goes into them. According to RAS, four out of five tobacco products that are sold illegally in Ireland are counterfeit. This is both a huge problem and a triple-edged sword, so to speak, in that the Exchequer is losing revenue, the health service will not get that revenue and the products being consumed are far worse than those which are regulated and on the market. It is time to wake up to this issue and tackle it straight-on.

Members must ensure there are harsher penalties for smugglers and we must introduce a minimum fine for smuggling. Although the Customs and Excise officers are doing an excellent job in protecting the country from the importation of illegal substances, they only have two scanners in the ports. Another one is needed and European Union funding is available, under the Hercule II fund, to buy an additional scanner for the ports to make it more difficult for smugglers to bring in those products Fines for selling illicit tobacco to children are also required, and greater public awareness on the dangers of consuming illegal products is badly needed.

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