Number of illegal cigarettes in Ireland hits 10 year high as one in five packs smuggled in
Revenue estimated the potential loss to the Exchequer from the consumption of 32.9 million illegal cigarette packs last year is approximately €422 million
The level of illegal cigarettes in Ireland was at its highest level in over a decade last year with almost 1 in 5 packs smuggled into the country, according to research by Revenue.
However, there is no evidence of any counterfeit tobacco products being sold to consumers in the Republic.
The latest annual survey commissioned by the tax authorities to assess the scale of illegal tobacco products being sold in the Republic found 19% of cigarette packs analysed last year were classified as illegal. It is the highest rate since the annual survey was introduced in 2009 and up from 17% the previous year.
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Revenue has estimated the potential loss to the Exchequer from the consumption of 32.9 million illegal cigarette packs last year is approximately €422 million – up €38 million on 2022 estimates.
However, the survey found that none of the illegal packs detected last year were counterfeit cigarettes. The figure for counterfeit tobacco products had peaked at 7% in 2021.
The survey showed 99% of illegal packs analysed in 2023 were categorised as “contraband” – normal commercial brands of cigarettes which were bought either duty paid or duty-free abroad and smuggled into Ireland. The remaining 1% of illegal packs were “illicit whites” which are classified as cigarettes manufactured for the sole purpose of being sold illegally in another market.
The level of cigarettes brought into the country from abroad by smokers for personal use was also at its highest ever rate last year. The survey found 15% of cigarette packs were legal but without duty paid in Ireland which indicates they were legally purchased in another jurisdiction and brought into Ireland by the smoker.
The rate had been below 10% for most of the past decade. “The 2023 results suggest that the prevalence of both illegal and legal non-Irish duty paid packs has increased in recent years,” said Revenue.
Separately, 20% of roll your own tobacco products analysed last year were also classified as illegal with a further 12% were legal but non-Irish duty paid. Tobacco products valued at €63.4m were seized as a result of 6,837 individual seizures by Revenue officials during 2023 as part of efforts to crack down on the illicit trade.
They included over 69.5 million illicit cigarettes with an estimated value of €55.7m as well as 10,191 kilogrammes of tobacco with a value of €7.7 million. One of the largest operations resulted in the seizure of 9.8 million cigarettes following the search of a vehicle in an intelligence-led operation in Co Louth.
The value of the seized goods was €8.2 million, representing a potential loss to the Exchequer of €6.4 million. In a separate operation based on risk profiling, Revenue officers detected 960kg of chewing tobacco worth an estimated €500,000 following the search of a commercial premises in Co Meath.
“We target all stages of the supply chain within the illicit tobacco trade, identifying and targeting the smuggling, production, distribution and sale of such products to achieve our goal of seizing same and where possible, prosecuting those responsible,” said Revenue.
Revenue said it developed and shared intelligence on both a national and international basis using analytics, profiling and detection technologies to identify and screen cargo, vehicles, baggage and postal packages to intercept illegal products.
It claimed much of the criminal activity surrounding the illegal trade in tobacco had a transnational and cross-border dimension which saw its officials work the European Commission’s Anti-Fraud Office (OLAF), Europol and the World Customs Organisation as well as An Garda Síochána.
Revenue said its team of 25 detector dogs also played an important role in assisting with the detection of cigarettes derived from criminal activity
The Minister for Finance, Michael McGrath stated last year that the Government has ensured through various Finance Acts over the years that Revenue had “the necessary statutory powers to tackle the illicit tobacco trade.” Overall, revenue from excise on tobacco products sold in Ireland last year totalled €837.9 million – down 16% or €155 million on the previous year.
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