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Home > Joint Committee on Jobs, Enterprise and Innovation Debate. Effects of black economy: Discussion with National Federation of Retail Newsagents and Grant Thornton [Tobacco].

[Oireachtas] Joint Committee on Jobs, Enterprise and Innovation Debate. Effects of black economy: Discussion with National Federation of Retail Newsagents and Grant Thornton [Tobacco]. (21 May 2013)

External website: https://www.oireachtas.ie/en/debates/debate/joint_...


Vice Chairman: The next item is a discussion with members of the National Federation of Retail Newsagents on proposed solutions to protect small businesses and the jobs they provide and Grant Thornton on the recently published report, Illicit Trade in Ireland. I welcome Ms Deirdre Drennan, Mr. Joe Sweeney and Mr. John Prendergast of the National Federation of Retail Newsagents to the meeting today to discuss proposed solutions. I also welcome Mr. Colin Fearon of Grant Thornton. 

…….. Mr. John Prendergast:  We have tabled four points in the illicit tobacco trade. The first is the smartphone app. We all have smartphones and there are thousands of apps. A new product called Codentify has been developed across Europe. It is a revolving code that can be built into a barcode for cigarettes or any other product. It is virtually impossible for that code to be broken because it revolves all the time. If it is put onto a barcode on cigarettes it gets a unique code subsequent to the barcode. The smartphone app is based on the fact that if one uses one's smartphone one scan the barcode, as you can check prices in a supermarket, the smartphone app would tell one whether that product was duty paid or not. It is as simple as that.

 

It does a number of things. It gives the person who potentially believes he or she is buying a legal product - because these products all look legal - the information to make an informed choice on whether to buy a non-duty paid product or a duty paid product. It gives the gardaí on the street who are witnessing proxy sales a tool they can use to check whether a product is legal or not on site. I stand to be corrected but I believe the Garda cannot approach somebody directly on the street now, but that is a job the Customs and Excise would normally do. There are people in open defiance of the law on Moore Street, at farmers' markets and at trading markets selling cigarettes they are not licensed to sell. We, as legitimate traders, have to have a tobacconist's licence to sell tobacco. We have to keep the product behind closed doors in our shops, where it cannot be viewed by the public, and these people are openly selling these products in defiance of the law. There are a number of areas around that which we can discuss later.

 

We have eight main ports in Ireland through which one can bring large freight. None of them have built-in x-ray or scanning machines and the country has two mobile 40 ft. scanners that have to be moved around the country. Realistically the criminals know where these scanners are going to be and which port they are going to choose so it is easy for them to tip each other off. We would like to see a port scanner in every port so it cuts down again on the means by which they can bring these things into the country. It is also a job generation project because one needs approximately 12 people to operate these scanners for every 24 hour rolling period. It is job generative and cost-neutral because the money that will be saved through the catching of the non-duty paid products can go towards maintaining these jobs.

 

The last item is the criminalising the consumers of illicit tobacco. We are referring here to the province of Quebec in Canada and its experience of pursuing consumers who knowingly purchased illegal cigarettes. Under the provision of the Tobacco Tax Act, consumers found in possession of untaxed tobacco are subject to a minimum penalty of C$350. This policy has received widespread support from tobacco control advocates such as the Canadian Cancer Society. The current regime for tackling the illicit trade in Ireland has focused exclusively on smugglers and we believe by introducing a credible financial deterrent aimed at consumers, the Government may be able to lessen the economic incentive to purchase low-priced cigarettes.

 

On increased revenue resources, we believe that direct contributions from the tobacco and alcohol industries should be sought by the Government to enhance the Revenue Commissioners and Garda resources as these are the industries which will benefit the most from a clampdown on the black market. We could be using the tobacco industries to finance the port scanners. We do not have to like what they do but tobacco is currently a legal product in Ireland on which the Government raises substantial sums of duty. We think we should be exercising every option to make these technologies available at no cost to the Exchequer…….

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