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JTI Launch Illegal Tobacco Trade Report

Published on Apr 23 2014 7:43 AM in Supply Chain

JTI Launch Illegal Tobacco Trade Report

JTI Ireland has launched a new report reviewing the illegal trade of tobacco products in Ireland.

The report, launched yesterday, explores the illegal trade in the current economic environment in Ireland, where criminals are earning profits equal to 1,000 times the fines imposed by the courts as well as non-duty paid tobacco costing the exchequer €250 million, not to mention the retail trade €450 Million annually.

The report from JTI shows that Ireland has one of the highest rates of illegal tobacco trade in Europe, with one in four cigarettes consumed not being taxed here. John Freda, General Manager of JTI Ireland said that JTI are committed to fighting "this highly damaging and unregulated trade,” as it is costing retailers and the taxpayer hundreds of millions, and continues to fuel crime in communities across Ireland, with criminals making in excess of €150 million.

One of the main concerns of the report is the societal impacts caused by illegal tobacco trade when criminals and gangs use children to sell products and channel the profits into other illegal activities. “Cigarettes are at least 50% cheaper on the streets than the ones sold by legitimate retailers, which encourages minors to buy illegal tobacco in unregulated markets and back alleys,” said Freda.

In addition, the report examines potential future drivers of this trade, including the Government’s proposal to introduce plain packaging for tobacco products and the revised EU Tobacco Products Directive. The report draws on the comparison of the Australian Government, which introduced plain packaging as a deterrent in 2012, but in now seeing a 20% increase in illegal trade, according to a report released by KPMG last week.

JTI believe that the trend of the illegal tobacco trade must be reversed and has contributed hundreds of millions of Euros to an EU-wide fund, which the Irish Revenue Customs service has used to invest in programmes. Freda commented, “We will continue to work closely with the authorities to fight smuggling. In fact, in 2013, JTI supplied information to OLAF relating to over 4 billion cigarettes in over 80 suspect shipments across Europe.”

Finally, the report calls on the Government to establish an interdepartmental committee to focus on the illegal trade of all products. Freda said that it is clear that the pragmatic law enforcement approach to fighting the illegal trade can work. “However, this must be married with a coordinated Government approach at the decision-making level, and this is not happening,” he said. JTI also welcomed Minister Noonan’s recent agreement to establish an informal working group on the illicit trade.

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