Cigarette black market hits profits at PJ Carroll
The strength of the black market in cigarettes last year contributed to pre-tax profits at PJ Carroll & Company declining by 36pc to €5m.
New accounts show the company suffered the sharp drop in profits as gross revenues from the sale of cigarettes declined from €215.3m to €205.63m.
The directors state that "the black market remains a huge challenge facing the business" adding that the company commends the Gardai and Revenue for their continuing efforts in fighting the illicit trade of tobacco products.
The directors point out that 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 repeated excise hikes of 50 cent introduced in Budget 2016and Budget 2017.
The directors also cite a future regulatory measures such as standardised packaging legislation as a risk facing the company. The firm's revenues included excise taxes and other taxes of €179m and the company's net revenues last year declined from €30.2m to €26.49m.
The directors state that the company has been through numerous years of decline in revenues which was primarily due by volume reductions as a result of the contractions in the legitimate market.
The directors also state that the ongoing trend of consumers turning to the black market may be accelerated by the impact of the Tobacco Products Directive on consumer choices.
The company last year paid a dividend of €1.72m.
Numbers employed by the company last year reduced from 33 to 29 and the firm last year spent €1m on redundancies.
This followed a spend of €250,000 under that heading in 2015.
Staff costs last year increased to €2.7m while interest payable increased from to €994,000.