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Noonan: Illicit Trade Being Driven By Price Increases

Published on Dec 12 2013 12:13 PM in Retail

Noonan: Illicit Trade Being Driven By Price Increases

Finance Minister Michael Noonan has told the Dáil that there is a clear link between the high price of tobacco products and growth in the illicit trade for tobacco.

In what the CSNA's Vincent Jennings described as the "clearest statement ever made by any government minister that the high price policy has the effect of encouraging illicit trade," the Minister made a direct correlation between illicit tobacco and price.

"There is a real problem with tobacco," the Minister said, in response to a question from Labour's Robert Dowds. "Much of it arises from the fact that ordinary decent citizens are buying illicit cigarettes and illicit tobacco, mainly for price reasons.

"As we continue to use price to discourage people from smoking, I think we will divert more and more of the trade to the illicit trade. It sounds like a cliché to say that if people stopped buying illicit cigarettes, the trade would stop very quickly. The incentive to buy is related to price."

Noting that more needs to be done to ensure that travellers are not carrying more than 800 cigarettes with them when they fly into Ireland (the Personal Allowance limit set out in EU law), the Minister said that cheap flights overseas are helping to exacerbate the issue.

"If one examines the prices of some flights," he said, "one will appreciate how quickly a profit can be made, especially by those who are prepared to travel a couple of times a week. The crackdown will continue. The Revenue Commissioners are chasing this up. The major price incentive associated with buying illicit tobacco makes it difficult to stop this activity."

© 2013 - Checkout Magazine by Stephen Wynne-Jones

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