Cigarette Contraband Soars Cigarette Revenue Plummets

Chelsea May 7, 2014 0

Cigarette smuggling seems to be a great problem that governments all over the world are seriously combating along with cigarette smoking. It is not clear whether governments are sincerely worried about the effects on public health or about the plummeting cigarette revenue as cigarette contraband continues to increase.

Cigarette Contraband Involvement Penalty

In Cork City, Ireland, a survey said that one in three cigarettes smoked there could be contraband. The survey showed that this causes massive losses to the cigarette excise tax revenue. Irish Tobacco Manufacturers’ Advisory Committee demands fines amounting to 100, 000 euros to any person caught to be involved in tobacco smuggling.

The group stated that illegal gangs smuggling cigarettes to Ireland are said to earn 3 million euros every week. During the second quarter of 2011, discarded cigarette packets were examined in the Cork region and 7.9% of them have no signs of paid excise tax. Toward the end of 2011, this figure increased to 24.6%. During the last quarter of 2013, it even increased to 27.9%.

While it is possible that some packets were legitimately brought to the country by tourists and holidaymakers in order to avoid cigarette taxes in Ireland, suspicions remain that the majority of these cigarettes were indeed smuggled from South East Asia and Eastern Europe.

Thriving Cigarette Smuggling In Ireland

In behalf of ITMAC, Market Survey Intelligence embarked on this survey. A spokesman stated that this cigarette contraband rise in Cork was only an example of how illicit tobacco (with no paid Irish tax) thrives across the country.

Tobacco grows widely available in the black market, out on the streets, and even door to door sales all over Ireland. It is shocking to know how illegal tobacco is so widely to any person. Anyone has the power to purchase tobacco.

Ireland is the country in EU where the second highest price for an average cigarette pack is 9.40 euros. Price in Britain is slightly higher at 9.94 euros. In Belarus, the retail price of genuine cigarettes is less than one euro for a pack of 20 cigarettes.

Counterfeit cigarettes are manufactured at an industrial scale in China where cigarettes are likewise sold at cheaper prices. Thus, smugglers could indeed make huge sums of profits from illegal cigarette trading.

Illegal Cigarettes Pose Health Threats

ITMAC expressed concerns that some of the Chinese made cigarettes are not checked for quality like the genuine and legitimate brands and might pose health risks to users. It has been reported that low quality smuggled cigarettes contain additives and also rodent wastes.

In Ireland, cigarettes are likewise heavily taxed at about 78% (goes to the Government excise and VAT) of the price per cigarette pack. One pack of smuggled popular cigarette brand in Cork is 4-5 euros only so purchasers would definitely be lured on buying them.

Recessions Pushes Smokers To Black Market

Recessions cause people to earn lower incomes. Add this to the high government duty and smokers would definitely be motivated to support illegal cigarettes, manufacturers claim.

Smugglers are also quite bold on their illegal trading since the penalties are less severe than for illegal drug trading. According to Japan Tobacco International, maker of Amber Leaf, Winston, Camel, Silk Cut, and Benson & Hedges, high cigarette taxes drive snuggling rate.

Spokesperson for JTI Alec Elliott remarked that 80% of the price of a cigarette pack goes to the treasury. A Customs spokesman said that smugglers are quite flexible and will switch their points of entries once stopped at a certain entry point. Biggest consignments are entered into the country through the ports while concealed inside containers that normally come from China, Vietnam, Malaysia and UAE. Those smuggled through airports are carried by mules from Canary Islands, Russia, Moldova and Poland.

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