Black market hits profits at Carroll's cigarette firm
Operating profits at the Irish arm of cigarette manufacturer PJ Carroll last year decreased by 20pc to €8.4m in the face of continuing competition from the black market.
The drop in profits came as net revenues decreased from €31.3m to €30.28m after "numerous years of decline".
Gross revenues - including duty excise and other taxes of €185m - declined from €220.9m to €215.3m in the 12 months to the end of December 31 last year.
The firm faces even higher excise duties on its products following the Government decision to increase the price of the pack of 20 by 50c in the Budget that will bring the price of the most popular brands to €11 per pack.
The 50c increase in the budget follows a 50c increase in Budget 2016 and a 40c increase in Budget 2015.
PJ Carroll & Company - a subsidiary of the UK-based British American Tobacco plc - recorded pre-tax profits of €7.8m after incurring finance costs of €629,000.
The directors stated: "The company has been through numerous years of decline which was primarily by volume reductions as a result of market contraction in the legitimate market."
They added that "the black market remains a huge challenge facing the business. PJ Carroll commends the Gardai and Revenue Commissioners for their continuing efforts in fighting the black market.
"Over the course of 2015, it appears that the black market may have been stabilising."
The report added: "However, the black market is still at a very high rate in comparison to other EU countries due to the high prices of tobacco products and the excise introduced in Budget 2015 (40c) and in Budget 2016 (50c)." The firm paid dividends of €4.05m.
The directors said disposable income continues to remain constrained due to tough economic conditions. "The net effect has been an accelerated decline in legitimate cigarette sales, growth in 'roll your own' and an ongoing trend of consumers turning to the black market for their tobacco products."