Threat to small traders from black-market cigarettes

When Brian O’Carroll walks down the Dublin city centre streets near his well-stocked, brightly lit shop, he almost always passes someone flogging something resembling one of his core products out of a tatty suitcase.

Because the cigarettes sold from suitcases are contraband, his rivals can undercut him by as much as 70 per cent – so the impact their illicit trade has on his legitimate business is “absolutely huge”.

He has been in retail for more than three decades and has watched with dismay in recent years as the popularity of the black-market hawkers in Dublin has grown. He is convinced they have been facilitated by impediments placed in his way by a State understandably anxious to make smoking less attractive through punitive pricing.

Under a Private Members' Bill introduced by a Fianna Fáil TD this week, gardaí may soon have the power to impose on-the-spot fines on smokers buying illicit cigarettes.

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Retailers say that if the Sale of Illicit Goods Bill introduced by Declan Breathnach successfully makes its way through the Oireachtas, the State will have a powerful tool to combat the sale of illegal cigarettes which, they say, are even more deadly than the legal products which kill tens of thousands of Irish people every year.

The Retailers Against Smuggling (RAS) group has warned that when people buy cigarettes on the cheap they are not getting what they pay for. When the organisation analysed contraband tobacco products they were found to contain “lead, asbestos and rat poison and very, very minute amounts of tobacco”.

Driver of footfall

Health concerns aside, RAS says smuggling is costing the wider economy as much as €2.4 billion per year, while also depriving small and medium-sized retailers of a major driver of footfall which hits their bottom lines.

Their struggle is set to be exacerbated post-Brexit with fluctuations in sterling and possible trade tariffs hitting legitimate businesses.

One of the reasons smoking is so attractive for small retailers is that they can compete on a level playing field with the big boys.

Legislation prohibits larger retailers, such as Dunnes and Tesco, from selling cigarettes at a discounted price, as they do with alcohol, so consumers have no incentive to stock up on tobacco at larger retailers.

According to the RAS, footfall generated by tobacco sales gives retailers an opportunity to sell more soft drinks and coffee, and for every additional €6 sold in these high-margin areas, they earn €2.60 – as well as 75c on a €11 packet of cigarettes.

Mr Breathnach says the State is losing billions each year in revenue and consumers who buy contraband cigarettes are disconnected from the reality of their purchasing decisions.

“The losses to the exchequer lead to a loss of investment and sometimes a loss of services in this country. I don’t think people tend to think in that way, that when they go out on the street and buy illicit cigarettes. They may feel they are saving themselves money but they’re actually depriving themselves of services.”

He stresses that by making the purchase of contraband an offence punishable by on-the-spot fines he is “not trying to create a police state” and is more interested in “the spirit of the law as opposed to constantly monitoring people”.

“It is to bring people’s attention to the fact that you are affecting our economy, you’re affecting our retailers you are affecting your own local shops.”

Understandable

Brian Gilsenan is a retailer close to the Border and active in RAS. He says he understands why people are attracted to the black market. “Hand on heart you cannot blame a person for wanting to buy a pack of cigarettes for €3.50 or €4 when they’re going to come into me and pay €11.50 for them.”

But even so he thinks “the vast majority of consumers will be on our side”.

“We have never said that cigarettes are good for you but they are no different from a bottle of minerals or a bottle of water or a bottle of milk. They are a core product that retailers have in their shops and while they remain a core product we will continue to sell them.”

Mr O’Carroll is equally supportive of plans to fine those who buy the cigarettes. “If there are no buyers there are no sellers so we have to tackle the buyer and we have to educate them. They don’t know what they are buying,” he said. “I know I am selling it is a legal product, I know it’s not good for you but it’s legal.

“I’ve seen surveys done on what’s available on the black market and it would frighten people. My father died at 67 of cancer and that doesn’t stop me selling cigarettes. We have choices in life and if you smoke that’s your choice.”