Price hike could see smokers turn to black market
Dublin People 27 Dec 2011
A NORTHSIDE shopkeeper and spokesperson for the Retailers Against
Smuggling action group fears this month’s extra hike on cigarettes will be the
final nail in the coffin for struggling traders.
Benny Gilsenan, who owns Benny’s store on Emmet Street, opposite Croke
Park in Dublin 1, explained how retailers are now forced to sell cigarettes at
three times the price of a box of smuggled smokes bought on the black market.
Indirect
In last month’s budget, the cost of cigarettes increased by 25 cent to
?¬8.90. However, Mr Gilsenan, who represents 3,000 retailers across the country,
explained that a further charge of 25 to 30 cent would be imposed this month as
a result of increased VAT and indirect charges.
“We estimate that the overall price increase will be 50 cent between the
December hike and VAT as well as inbuilt charges from the supplier to cover the
increase in car tax and fuel,
? he told Northside People.
“On average a box of 20 cigarettes will cost around
?¬9.15 or
?¬9.20,
whereas smugglers are offering up to three packets for that price.
“There isn’t a huge difference in the packaging so the average Joe Soap
will think that they are buying the same product at a cheaper price but they
aren’t.
“The contaminated, smuggled cigarettes are made of far more harmful
ingredients.
?
Mr Gilsenan, who was recently crowned Convenience Store Champion of the
Year, believes the market has been left wide open for smugglers to offer cheap
cigarettes to cash-strapped smokers.
“More and more people have been forced into buying cigarettes from
smugglers because of the huge difference in price from the packets you buy in a
shop,
? he explained.
Door-to-door
“The market has become so big for criminals that they are prepared to go
door-to-door for sales.
“Buying a packet of cigarettes is now a luxury given the price.
“However, the Government is fooling itself if it thinks that people will
kick the habit because of the cost when a cheaper alternative is readily available.
Lose
“The net result of the price increases is that the Government could
actually stand to lose
?¬50 million from the revenue generated from cigarette
sales because people will buy from illegal smugglers.
?
Mr Gilsenan, who last year met with an Oireachtas committee to discuss
the issue, maintains that the Government’s main intention is to generate
further revenue for the Exchequer rather than to tackle the health problems
associated with smoking.
“Two days before the budget cuts were announced it was revealed that the
biggest health problems were those associated with alcohol, yet the cost of drink
wasn’t increased,
? he stated.
Drugs
“The second biggest health problems were those associated with drug use,
yet as far as I know there hasn’t been any extra legislation to crack down on
drug dealing.
“But yet there seemed to be no question that smokers would be hit with
price increases.
?
On average, cigarette sales make up between 20 and 30 per cent of
revenue for retailers.
Mr Gilsenan added that Retailers Against Smuggling intended to go back
to the drawing board when it comes to their strategy with the Government for
the year ahead.
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