Retailers Against Smuggling (RAS) has warned the Government that further increases in tobacco excise in Budget 2027 will accelerate the growth of Ireland’s illicit tobacco market, further undermine legitimate retailers, and contribute to significant ongoing losses to the taxpayer.

Launching its Pre-Budget Submission 2027 today (22 June), RAS said Ireland’s tobacco tax policy is increasingly driving consumers towards cheaper illicit and non-Irish duty paid products which are now widely available across the country.

The retailer group said the continued growth in illicit tobacco sales is having a major impact on local convenience stores, newsagents and forecourts, many of which rely heavily on tobacco sales to remain commercially viable amid rising labour, energy and compliance costs.

Smoking prevalence increase

RAS pointed to the latest Health in Ireland data from the Department of Health, which shows smoking prevalence increased from 2023 to 2024 despite repeated excise increases in recent years.

The organisation said this demonstrates that further tax increases will no longer push people towards quitting, but instead displacing consumers towards untaxed and illegal products.

The publication last month of Revenue’s Products Survey found that 38% of cigarettes in circulation had no Irish excise duty paid, either because they were illegal or purchased outside Ireland. In the Roll-Your-Own tobacco market, the figure rises to 45%.

RAS estimates Ireland’s untaxed tobacco market is now worth between €790 million and €845 million annually.

In a statement, Benny Gilsenan, RAS national spokesperson, said: “The Government is allowing hundreds of millions of euro to disappear into the black market every year because tobacco taxes here have gone completely over the top.

“You now have people buying packs of 20 cigarettes for a fraction of the price through illegal sellers, social media and products being brought in from Spain and the Canaries. Meanwhile, the local shop owner, like myself, trying to do things properly, is being hammered.

“The worrying thing is smoking rates have actually gone up despite all these tax increases. So, the policy clearly isn’t working. Criminal gangs are making money, the taxpayer is losing out, and legitimate retailers are the ones taking the hit.”

‘Keeping doors open’

Dublin-based retailer Phillip Craddock, highlighted that for small retailers, tobacco sales are still a huge part of keeping the doors open.

“A lot of local shops, newsagents and forecourts depend on that trade to survive,” he added.

“When customers start buying cheaper illegal cigarettes, retailers don’t just lose the sale on a pack of 20 – they lose all the extra business that comes with it too.

“The black market is growing in plain sight and retailers across the country are paying the price. The Government needs to stop pushing prices higher and start focusing properly on enforcement.”

Pre-Budget Submission 2027

In its Pre-Budget Submission 2027, RAS has called on the Government to:

• Freeze excise tax on all tobacco and vaping products in Budget 2027
• Provide additional x-ray scanners and frontier staff at Irish ports to increase freight screening rates and target organised smuggling networks