Mick Wallace (Wexford, Independent) | Oireachtas source

I was also amused when I listened to Deputy Finian McGrath this morning.

To be honest, I thought he spoke very well. He is obviously passionate about his stand and I thought he was good on it, although I do not agree with him.

The tobacco industry is also very impressive in how it operates. It is very powerful, very effective and very efficient, but I do not agree with how it runs its business all the same. The basic principle of the tobacco companies is that profit matters most and people do not, which is not something I buy into very much.

Deputy Finian McGrath insinuated that smokers were being hounded. I would not be in favour of hounding smokers at all and I would have no interest in banning smoking. Some seem to think it would be illegal if it had only started today, but I would not be in favour of banning it, no more than I would be in favour of banning cannabis. I believe in the right to choose. However, just because I would not be in favour of hounding smokers, as a State we have a duty to inform and to educate people, particularly young people, in the interests of their health. This would also be in the interests of the finances of the State because the results of the abuse of smoking are costing us so much. I am a great believer in education, as I am sure most of us are. I believe a greater effort on the part of the State to get the message across to young people that it is a great idea not to smoke would be money well spent.

The medium of sport is a wonderful vehicle to fight abuse of any substance, be it with regard to smoking, alcohol or hard drugs. I coach the under 16s, under 18s and under 19s in Wexford for both the county teams and the Wexford Youths. In those three squads, there is not one smoker at present because nobody can play sport at a high level and smoke. Some €26 million was divided up in the last sports grant. If the House considers that the cost to the State of smoking is in the region of €1 billion and the abuse of alcohol is costing the State approximately €3 billion, looking at it simply from an economic point of view, the sports grants should be amounting to an awful lot more than €26 million if the Government wants to invest in this area and bring down the cost to the State of smoking and alcohol abuse.

The tobacco industry certainly has the money to combat public health policy objectives. Sadly, the State does not have quite as much funding available to promote positive health in the same area. For this reason, I am of the philosophy that we should take more tax from the industry. The profit margins of British American Tobacco and Imperial Tobacco between 2004 and 2011 are astounding and vary between 28% and 45%, which is superb in terms of profit on turnover. To compare them with Cadbury and L'Oreal in the same period, those companies averaged approximately 16% and, while they were pretty successful, the tobacco industry leaves them for dead in terms of its ability to make serious money.

This directive sets out that, for the sake of free competition, manufacturers and importers must be free to set their own maximum prices for their products. I find this a little ironic given this is an industry with very little competition and controlled by very serious players. If I was starting a little industry in the morning, I would not be taking on these fellows and would think of doing something else. Making cigarettes in competition with these fellows would be a tough game I imagine.

Competition law underpins neoliberal policies evident in the EU trade system. In the European Court of Justice judgment, protecting the channels of free market economics is clearly a priority of the EU and comes at the expense of public health policies and the citizens of Europe, which I find disappointing. I remember, when we were arguing about the Nice treaty, that the ability of the same treaty to facilitate large business at the expense of the citizen was certainly at its core. We have not seen the end of neoliberalism by any stretch, and the present austerity system and philosophy is very much part of that same agenda.

I understand the ruling prohibits minimum pricing rules but does not prohibit maintaining high prices by using taxation. Will the Minister consider increasing the taxation rate on cigarettes to compensate for the removal of the State's power to impose minimum pricing? I note the tax take was 79% before the budget and I presume that has gone up a little with the 10 cent increase per packet. However, the rate is 90% in the UK and I understand we could increase our revenue by well over €100 million if were to do this. We could use this money to promote positive health in this area.

I note there was talk late last year of introducing minimum pricing to reduce the misuse of alcohol. Is the Government still planning to do this, as was recommended in the 2012 Steering Group Report on a National Substance Misuse Strategy? I am sure the Government is checking whether it would be legal. Given the ruling on tobacco, I have my fears there might be some opposition to this at EU level.

The British Government has been particularly successful at addressing the smuggling issue whereas we have not done as well in challenging that. The British have reduced smuggling by almost half and it has been money very well spent as they have increased their revenue to the state by over stg£1 billion. While it is a country much larger than ours, even in relative terms we could save a lot of money if we invested resources in tackling smuggling.

The point is well made in an article by Mr. Chris Macey from the Irish Heart Foundation some months ago - I found it so good, I kept it. Mr. Macey stated:

Our template for action is provided by the UK which had roughly the same smoking and smuggling rates a decade ago as we have now. By combining high regular tax increases, tough anti-smuggling measures and effective stop-smoking strategies, they now have two million fewer smokers, including a 50 per cent reduction among children, while the illicit market has fallen from 21 to 12 per cent. And for an annual outlay of £300 million, tax revenues have risen by £1.2 billion, whilst health service savings total £1.7 billion.

These are impressive figures by anyone's measure. The article continues:

Tax increases alone can’t be fully effective because cheap smuggled tobacco blunts their impact. We must give Customs, which has lost hundreds of staff in recent years, and the similarly hard-pressed Garda, the manpower and equipment, along with the tough justice in the courts, required to deal with smuggling. And we must give greater support to free more smokers from the grip of addiction.


If such co-ordinated action is taken we can effectively tackle the health catastrophe that costs this country one of its citizens roughly every 90 minutes and massively increase tax revenue and cost savings for Ireland’s cash-starved health service.

The Minister for Health said that approximately one in four people in Ireland are smokers. We need to examine the effectiveness of anti-smoking strategies in other countries. For example, in California the proportion of smokers is down to 11.9%, which is pretty good. Canada and Australia between them average 17%. A report in Britain two years ago pointed out that better policies can reduce the numbers smoking, reduce the associated costs and pain for society and produce increased revenues for the State. Greater investment in this area will be money well spent. I would like to see the minimum price for alcohol increased too, if the European authorities deem that legal.

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