A MEETING in Limerick has heard that almost one-third of cigarettes smoked here come from illicit sources.
Traders locally are suffering losses of up to 30% from their annual sales due to the supply of smuggled cigarettes in Limerick.
Criminal gangs are using community notice boards in the city, as well as meeting workers when they finish work shifts to sell imported cigarettes, which can contain up to 17 times more lead than conventional smokes.
Heavy taxation at government level has been blamed on the upsurge in illegal tobacco shipments.
As a result, scores of retailers have been forced to let staff go, a meeting in the Strand Hotel has heard.
Organised by accountants Grant Thornton, the event laid bare the full extent of the problem, with a survey by the National Federation of Retail Newsagents (NFRN) revealing 27.2% of cigarette packs in Limerick found in the city’s waste bins were not bought on these shores. The trade body has been doing similar checks on discarded cigarette packs across Ireland - and those at the meeting demanded action from the only government TD present, Kieran O’Donnell.
Local politicians also present included Croom county councillor Patrick C Fitzgerald, and Limerick City North member Maurice Quinlivan.
Local retailer Michael Gleeson, of Gleeson’s Spar in Henry Street, said: “You can tell each week what days the [illicit] deliveries come into Limerick just by the sales, and the placing of posters in different languages on community notice boards, advertising sale of illicit goods.”
He predicted he has suffered losses of at least 25% - but admitted this could be a lot higher.
“The government has singularly created a market for a black economy. When you create a market, it will flourish - and this has happened in Ireland,” he said.
Joe Sweeney, of the NFRN believes very little is being done to stem the tide.
“There is not enough enforcement. The penalties are too weak, and for that reason, we find a lot of criminals are turning to tobacco: the rewards are high, the risk is low,” he said.
Clarina man Vincent Jennings, who heads the Convenience Stores and Newsagents Association, said there was once a thriving market among the production lines at Dell.
“It is a drip-drip knock-on effect of reduced sales, which reduces the viability of a store, and this is the major problem. Urban areas suffer a greater amount of smuggled product than rural ones. There is a well established network developed over a number of years which has included the Dell factory, where people were supplying for order, smuggled products.”
This still exists in other manufacturing facilities, he added.
Mr O’Donnell said tackling the matter remains a priority for the government, with a report due.
“In terms of the Dail, it is very much a priority. A specific committee has been set up under Damien English’s chairmanship,” he confirmed, “The issue is: how do you marry the reduction in illicit trade with the health aspect.”
Indeed, in order to deter people from smoking, the government has inflicted taxation on cigarettes to the degree where Ireland has some of the most expensive tobacco products in the eurozone area.
Traders at the conference called for a reduction in the tax rate to make it easier for struggling retailers. It was noted in Germany that cigarettes are sold for a relatively cheap €5.26 a packet, without any damage to the economy, or health on a widespread basis.
Brendan Foster, a partner in Grant Thornton, which commissioned the study, said there are three other areas where traders are suffering loss at the hands of smugglers.
These are fuel, including illegal green diesel, digital piracy and pharmaceuticals. “The cost to the economy on an annual basis could be €1.5bn on the higher scale, or half a billion on the lower scale. But at any measure it is a significant loss to the economy when you measure it against the budgetary constraints and fiscal issues.”
He said the public must understand that getting a bargain from illicit traders can affect scores of different people, with newsagents losing out in particular on impulse purchases they may make when buying cigarettes.