Mary Butler (Waterford, Fianna Fail) | Oireachtas source

Fianna Fáil, through Deputy Breathnach, is bringing forward this legislation to tackle the sale of illicit goods such as tobacco, alcohol and solid fuel. The Bill seeks to make it an offence to purchase such illicit goods, particularly from an unregistered or unlicensed retailer.

Illicit trade is continuing to develop in Ireland and is becoming a real threat to the Irish economy. According to some estimates the black economy costs the overall economy over €2.3 billion a year and costs the Exchequer more than €800 million a year. We do not know the true figure as by its very nature this activity remains unseen so the costs could be far higher.

Tobacco sales are a large part of the business of many small shops. Government excise duties have increased the cost of a 20-pack of cigarettes to an all-time high. This in turn has turned customers towards illegal traders who are selling illegal, and sometimes unsafe, products at a much lower price.

As an incentive for the supply and demand of illicit products price remains the main driver of illicit trade. There is also another issue, however, which is health. Illicit cigarettes are often illegally manufactured and imported from foreign countries such as China or Paraguay, with a lack of quality control or regulation. Some illicit cigarettes have been found to contain dangerous chemicals, dust, excessively high tar levels and even asbestos. While the non-financial impacts include health, smuggling also undermines the legal and regulatory system, grows organised crime and causes reputational damage to brands. There is growing anecdotal evidence to suggest that the solid fuel trade on this side of the Border has been affected by a combination of cheaper prices for similar products in the North and by fuel smuggling.

Small and medium-sized businesses simply cannot compete with the low prices being offered for these illegal and frequently fraudulent products. Small businesses are the lifeblood of local communities in towns and villages and we need to do more to help protect them from the impact of smuggling.

Online sales are already a huge competing factor for the retailer located on the high street who is dealing with all the costs of rent, rates, VAT, insurance and staff costs. I am the Chairman of the Oireachtas Joint Committee on Business, Enterprise and Innovation, which recently conducted a detailed study into the cost of doing business in Ireland. There were very many common denominators going through for the retailer as against the online retailer. The report referred also to how smuggling is having a huge effect. The ongoing sale of illicit goods may well be the tipping point for many legitimate businesses.

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