Pre-tax profits at tobacco firm PJ Carroll last year declined by 6pc to €8.4m as the number of cigarettes legally purchased in the State declined from 4.3 billion to 4.1 billion.
According to accounts just filed with the Companies Office by PJ Carroll & Company, gross revenues at the firm dipped by 2.4pc from €251.7m to €245.6m.
After taking into account €211.1m paid to the Government in duty excise and other taxes, the firm's net revenues declined from €35.5m to €34.5m.
According to the directors' report, the decline in revenues in the firm, which is owned by British American Tobacco, "was driven by volume reductions of 2.4pc as a result of market contraction".
The firm said that the overall decline in the market "was primarily due to the growth of illicit trade".
"Overall market share for the year was 15.97pc, which is comparable to 2010."
The drop in operating profit was due primarily to reductions in sales and a marginal increase in input prices.
The filings show that the firm paid a dividend of €6m last year.
A note in the accounts states that "PJ Carroll & Company, as well as other leading cigarette manufacturers, have been named as defendants in a number of product liability cases in the Republic of Ireland.
"The vast majority of these claims have been terminated through the dismissal of these claims by the courts or through the plaintiffs choosing to discontinue with their claims."
The note adds: "As at December 31, 2011, 15 plaintiffs have claims remaining against PJ Carroll & Co and/or its subsidiaries. There are presently 20 cases remaining against the industry as a whole in the Republic of Ireland."
It also states: "PJ Carroll & Company intends to defend all the claims vigorously and has available to it substantial defences both on the law and the facts.
"Since the amount of damages claimed has not been specified, it is not possible to determine the total amount of the claims pending, but the aggregate amounts involved in such litigation are potentially significant."
The figures show that the numbers employed by the company last year declined from 44 to 42, with staff costs decreasing from €4m to €3.8m.