Michael McCarthy (Cork South West, Labour)
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701. To ask the Minister for Health if his attention has been drawn to evidence that suggests that the introduction of plain packaging cigarettes will lead to an increase in illicit trade, counterfeit and contraband; the amount this costs the exchequer in lost revenue at present; and if he will make a statement on the matter. [32619/14]

Leo Varadkar (Dublin West, Fine Gael)
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I would like to assure the Deputy that I am confident that the Public Health (Standardised Packaging of Tobacco) Bill 2014 will have a positive impact on health and is a proportionate measure. As the Deputy may be aware, the tobacco industry has argued that standardised or plain packs would be easier to forge and would lead to growth in illicit trade of tobacco products. However, the Revenue Commissioners have advised me that they are satisfied that the standardised packaging legislation will not have a significant impact on their work in relation to illicit trade in tobacco products. The Revenue Commissioners have advised that the tax stamp is a key means for them to distinguish between legal and illegal products, irrespective of the way in which the cigarettes are packaged. Tax stamps will remain a fixture on tobacco products following the introduction of standardised packaging, and contain all features possible to minimise the risk of counterfeiting.

Combating the illegal tobacco trade is, and will continue to be, a high priority for the Revenue Commissioners. They have extensive cooperation with An Garda Síochána in combating the illicit trade, and in addition, cooperation takes place with other revenue administrations and with the European Anti-Fraud office, OLAF, in the ongoing programmes at international level to tackle the illicit trade.

Research carried out by the Office of the Revenue Commissioners, in conjunction with the HSE National Tobacco Control Office, indicates that contraband represents the majority of illicit cigarettes. Figures from 2013 indicate that the proportion of smokers classified as having an illegal pack was 12%, representing a decrease of 4% since 2009. These findings indicate that the level of consumption of illicit product is being contained, although Revenue remains determined to confront the illegal trade in tobacco products, to optimise levels of seizures of illicit tobacco product and to pursue those found to be involved in this illegal activity. The research estimates that the consumption of illegal cigarettes represented a loss to Revenue of approximately €212 million in excise duties and VAT in 2013; a decrease from the estimated figure of €249 million in 2010.

The 2014 EU Tobacco Products Directive sets out further measures to be adopted by Member States in order to tackle illicit trade; in particular, it includes provisions relating to traceability and security features of tobacco products. Tobacco products will be marked with a unique identifier and security features. This will allow for their movements to be recorded and for such products to be tracked and traced throughout the EU. This will also facilitate the verification of whether or not tobacco products are authentic.

Following Government approval, Ireland’s Permanent Representative to the United Nations signed the Protocol to Eliminate Illicit Trade in Tobacco Products, adopted by the Parties to the WHO Framework Convention on Tobacco Control (WHO FCTC), in New York on 20 December 2013. The new international treaty is aimed at combating illegal trade in tobacco products through control of the supply chain and international cooperation. As a key measure, Parties commit to establishing a global tracking and tracing system to reduce and eventually eradicate illicit trade.

In view of the above, it is anticipated that illicit trade of tobacco will not increase as a result of the introduction of standardised packaging.