Heard a representative of retailers on Damien Kilberd's Newstalk show on Monday complaining about the big loss of trade to bootleg cigarettes.In recent years,many criminal gangs have switched their attention from drugs to cigarettes. They are attracted by the huge profits in bootleg cigarettes. Risks of imprisonment,court fines and gang violence are minimal.
The marketing method is simple but very effective. Leaflets offering cigarettes at half price or less of prices in shops are dropped through letter boxes, orders can be placed by ringing a mobile phone and home delivery is done by the bootlegger*.
The retail trade rep claimed that the government has lost a quarter of the market worth hundreds of millions in cigarette taxes so far this year. Fines for small time bootleggers who deliver to customers are modest,although an amendment to the Finance Act last year permitted fines of up to €120,000.
The Department of Finance is in denial about this threat to government revenues and court judges don't realise the importance of the threat. The price of official cigarettes is absurdly high in Ireland given abundant available supplies of bootleg cigarettes,some of which come from as far away as China with perfectly counterfeit packaging. The bootleggers will take half or more of the market unless official cigarette prices are cut drastically.
*This is different from the method used for generations in high tax New York City to market bootleg cigarettes brought in from tobacco states in the US South. The bootlegger typically visited the reception area on an office floor to receive the collected carton size individual orders. Apparently,collecting these orders was considered a normal duty of a receptionist,but hostility to smoking may have changed attitudes in the past decade! The bootlegger returned later-maybe days later to make it difficult for the police to catch him-with a satchel of cigarette cartons and collected the payment from the receptionist. The mobile phone and emails have made the visit to take orders unnecessary.