Moves to stop illegal cigarette trade boost black market
The Government is missing the target when it comes to reducing tobacco consumption, writes Tony Hickey
I strongly believe that smoking, and the distribution of tobacco products, should be closely regulated by government and State agencies. This is to protect public health, especially that of children, and to safeguard the very considerable revenues that the Exchequer generates.
From personal experience, I know that the money made by criminals and subversives from illegal involvement in the tobacco trade is very substantial and continues to grow. In recent years, successive governments have increased the taxes and duties on cigarettes in a laudable effort to reduce smoking.
Unfortunately, this policy has had the unintended consequence of driving many cigarette buyers, including children, into the black market where there are numerous suppliers at markets, on the streets and going door-to-door offering cut-price products of sometimes dubious quality, but at much lower prices than legal outlets. The Minister for Finance acknowledged this himself last month when he said, "As we continue to use price to discourage people from smoking I think we will divert more and more of the trade to the illicit trade."
In a stressed economy, it is not too surprising that normally law-abiding smokers are prepared to turn a blind eye to where there money is going when they buy illegal cigarettes. There is abundant evidence backed up by intelligence from gardai and Customs in Ireland, and security agencies in Europe and the USA, that subversives and well organised criminal gangs have taken over the illegal cigarette trade.
The reasons for this are as old as crime itself: the lure of big money to be made and low risks of detection. High retail prices have already given the illegal trade in Ireland proportionately the largest share in Europe, at somewhere around 20 per cent of the cigarette market.
Recently it was reported that police and customs officials in the UK believe that two named convicted republican subversives were behind much the cigarette smuggling in Ireland. It is believed that these men have close ties to violent dissident republican groups, such as the New IRA which have been linked to a recent spate of letter bombs.
While I fully support measures to inform smokers of the damaging health effects of smoking through on-pack pictures and messages, I think plain packaging runs a high risk of boosting the illegal cigarette trade further.
When it comes to tackling crime, I have always believed that government policies should be backed up by evidence of efficacy and likely results. In the case of plain packaging leading to reduced smoking this evidence of likely results is not apparent.
My former colleagues from the Gardai and Revenue Commissioners acknowledged at recent hearings of the Oireachtas Health Committee that since plain packaging has only been in place in Australia for just over 12 months it is extremely difficult to say with any certainty what the long-term impact of plain packaging will be on the illicit cigarette trade.
In fact, based on the Australian experience so far, it has shown no evidence of reduced smoking prevalence. There has, however, been a marked increase in illicit trade and smuggling of cigarettes in that country.
On the basis of the evidence from Australia, I believe that the already well-known involvement of criminal and paramilitary gangs in the illicit cigarettes trade in Ireland will worsen, with markedly negative effects on crime levels and demands on police resources that may not be matched by a socially desirable reduction in smoking levels.
Anonymous-looking and plain-packed cigarettes will increase the ease and likelihood of illegal selling and further undermine the highly regulated legal supply chain. This will have further implications for Government revenues, and give the criminals and subversives in the illegal trade a further income boost and chance to entrench themselves in our society.
In my view, the Irish and UK governments are missing the target when it comes to efforts to reduce tobacco consumption. They are absolutely right to try to stop people smoking. Their problem is that the steps they have taken so far have had little impact.
Not only are they having no effect on smoking, but are also creating a much bigger problem by giving criminals and subversives a foothold in what many hard-pressed buyers see as a rational economic activity – seeking the lowest price wherever they can.
Before jumping headfirst into this legislation we need to have a proper debate on this issue and carry out a thorough assessment of the plain packaging proposals to determine whether or not they will have an impact on the illicit trade.
I believe we must look at measures aimed at children and young people in particular and cherry-pick the very best ideas from those countries and places where programmes to get inside children's heads and negate any wish to start smoking have worked best. There are models from abroad that have shown the way forward. This is the route to reducing smoking, not measures against existing smokers that only fuel the black economy.
Tony Hickey is a former Assistant Commissioner of An Garda Siochana. He now works with Risk Management International (RMI), whose clients include prominent members of the tobacco industry, including Philip Morris International