Ireland: Retailers Fuming as Poptential Profits Go up in Smoke

Source from:  Kildare Nationalist (ie)  05/29/2013

ILLEGAL cigarette sales are leaving local retailers fuming as literally millions of euro in potential profits go up in smoke.

The persistent problem of illegal tobacco products mainly the result of a criminal trade which is netting the perpetrators a staggering €3million a week in this country has prompted Kildare retailers to band together for a special meeting taking place this week.

The group, under the umbrella of a national network called Retailers Against Smuggling (RAS) will meet at the Keadeen Hotel, Newbridge, this Thursday evening 30 May at 6pm. All business owners who are affected by the illegal sale of cigarettes are welcome to attend, while representatives of the gardaí,  revenue officials and local politicians have also been invited.

Surveys undertaken in the past few years have consistently shown that Kildare has one of the worst problems in the country, with one investigation showing that almost half of the cigarettes sold in Newbridge had no Irish tax paid on them.

Illegal sales at fairs and markets including the Kildare town market have also hit the headlines on several occasions but the retailers believe that not enough is being done to deal with the problem.

The Tobacco Manufacturers' Advisory Committee has blamed the high level of duty on legitimately sold cigarettes and tobacco products, claiming that it is encouraging the black market and turning Ireland into "a haven for crime syndicates" with the lucrative illegal trade worth as much as €3m a week nationally. In turn, this of course means millions of euro in potential revenue and in business profits literally going up in smoke.

Now the Kildare retailers have apparently reached burn-out, with trade suffering major damage as a result of the proliferation of illegal cigarette sales.

"The problem is getting worse and will spiral out of control unless the government, gardaí and revenue do something about it," said Noel Kelly of Kelly's newsagents in Monasterevin, who will be one of the speakers at Thursday night's meeting. He added that on average, cigarette sales and sales of impulse items account for between 30% and 40% of an independent retailer's sales, so the drop in cigarette sales ha"a really serious impact".

"Given the general recession, it's hard to fully assess the impact but it is very significant," he said.

Mr Kelly also addressed an issue which is frequently ignored, the health impact attached to illegal sales.

"Retailers are subject to penalties for selling cigarettes to those under 18, yet at markets like the one in Kildare town, minors have been seen going round actually selling cartons of cigarettes and there is no control over who buys them, even children. The government doesn't seem to have looked at this issue at all, and the penalties for those found illegally selling cigarettes are insignificant."

He added that the law needs to be changed to deal with this anomaly and said that putting resources into clamping down on illegal sales would also be "self-financing" in terms of increased revenue.

Benny Gilsenan of RAS noted that the fact that nearly half of all Newbridge's cigarette sales are black market is a real indicator of the scale of the problem. "We have been calling on the government for a number of years to take action on this issue, but so far there has been no concrete response. Does this mean that they are willing to deprive legitimate retailers of income and let serious criminals sell to anyone they please?" he asked.

Mr Kelly, who has been a newsagent for the past 38 years, is a founder member of the Convenience Stores and Newsagents' Association (CSNA) having previously served on other representative bodies.

He noted that tobacco smuggling is attractive　because of the high price attached to legitimate purchase in this country. There have been two price rises in the last 18 months,he said, adding that a new EU Tobacco Products directive, which will introduce changes including minimum package sizes for 'roll your own' tobacco, is likely to make the situation even worse.

Saying that action needs to be taken now, Mr Kelly observed that  following a meeting organised by Retailers Against Smuggling in Swords last month, there was a major clampdown on markets in the locality where illegal cigarettes were being sold. This shows that by the authorities being made aware of the scale of the problem, and using sufficient resources, they can tackle it, he concluded. Enditem