Irish Consumers Buy Tobacco Abroad Due to Price Gap; €590M Exchequer Loss
Irish consumers are increasingly buying tobacco abroad, mainly in Spain, due to significant price differences and high excise duties in Ireland. This trend, highlighted by Retailers Against Smuggling, is fueling the illicit market and costing the exchequer an estimated €590 million annually. Stronger enforcement of new Revenue rules is urged.
A retail industry body reports that the significant price difference between tobacco in Ireland and mainland Europe is driving Irish consumers to purchase tobacco abroad to avoid excise duties. Spain is the primary market, accounting for 48% of these purchases, followed by the UK and the Canary Islands.
Data from Amárach, commissioned by Retailers Against Smuggling (RAS), shows that 28% of 1,000 Irish adults polled had bought tobacco abroad (21%) or duty-free (15%). RAS attributes this trend to the stark price gap; excise duty on a packet of cigarettes is about €3 in Spain compared to almost €11 in Ireland. The recent budget increased a 20-cigarette packet price by 50 cent, bringing it to almost €19.
Benny Gilsenan of RAS stated that smoking rates are no longer declining rapidly, while the illicit market expands. Revenue figures indicate illegal cigarettes comprise over a quarter of the market, causing an estimated annual loss of €590 million to the exchequer. RAS calls for stronger enforcement of new Revenue rules introduced last year to address breaches of tobacco import limits.