Tuesday, 13 May 2014

Ceisteanna (161)

Maureen O'Sullivan


161. Deputy Maureen O'Sullivan asked the Minister for Finance his views on tobacco companies' exaggerating tobacco smuggling statistics especially in relation to the recent report, The Illicit Tobacco Trade Review 2013, by Japan Tobacco International and its campaign against plain packaging; and if he will make a statement on the matter. [21174/14]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by the Revenue Commissioners that the extent of the illicit cigarette market in Ireland is estimated through annual surveys of smokers. These surveys are undertaken for Revenue and the National Tobacco Control Office of the Health Services Executive by Ipsos MRBI. The analysis of the results of the  survey for 2013 are not yet fully finalised but  preliminary analysis indicates that 11% of cigarettes consumed in Ireland in 2013 were illicit and a further 5% of cigarettes were non Irish duty paid which were legally brought into the country. The comparable figures for 2012 and 2011 were 13% and 14% respectively with the legally imported non Irish duty paid cigarettes at 6% and 7%. This would suggest that the extent of the problem is being contained, as a result of the extensive action being taken against the smuggling and sale of illicit product.

I am satisfied that the Ipsos MRBI survey is the best indicator of the extent of the market in illicit cigarettes. This is because of the methodology used and the consistent manner in which the survey has been undertaken over a number of years.  It is geographically representative and surveys population samples that are statistically robust and can be extrapolated with a reasonable degree of reliability to the population at large.  In addition this methodology, in contrast to other methodologies such as empty pack surveys, is capable of distinguishing between illicit cigarettes and legal personal imports, which is a very important consideration.  The Revenue Commissioners are not in position to levy Irish taxes on products which are already taxed in other EU member states.

I am aware that some other surveys, including The Illicit Tobacco Trade Review 2013 by Japan Tobacco International, indicate a higher level of illicit cigarette consumption. However, I do not accept the validity of those other surveys, as they are not representative of the entire smoking population, do not take into account legal personal imports from other jurisdictions and are frequently based on empty pack surveys.  I am advised that empty pack surveys are unreliable as robust estimates of the scale of non-Irish duty paid cigarettes. With empty pack surveys, it is impossible to know if the location surveyed is in any way representative (an extreme example would be Temple Bar or international sporting event). Even if there was a representative location, publicly discarded packs are not likely to be representative of packs overall.

In looking at higher estimates of the level of illicit consumption that come from other sources, it also needs to be borne in mind that the tobacco industry claims must be viewed in terms of their interest in minimising tax increases while imposing significant price increases of their own.

Combating the illegal tobacco trade is a high priority for the Revenue Commissioners. Their work against this illegal activity includes a wide range of measures designed to identify and target those who are engaged in the supply or sale of illicit products, with a view to seizing those products and prosecuting those responsible. This multi-faceted strategy includes ongoing analysis of the nature and extent of the problem, developing and sharing intelligence on a national, EU and international basis, the use of analytics and detection technologies and ensuring the optimum deployment of resources at points of importation and within the country. The commitment to acting against all stages of the supply chain for illicit products will be maintained and Revenue will continue to make every effort to ensure that those involved in the illicit trade are brought to account before the Courts for their criminal activities. A new multi-annual strategy for dealing with the problem is being drawn up, and the Revenue Commissioners are consulting key stakeholders in preparing this document.