“If I was Nidge from Love/Hate I’d deal in tobacco, not drugs.”
Frank Gleeson, Chairperson of Retail Ireland and Retail Director of Topaz, was the first speaker at Shelflife's Conference on Illicit Trade. He highlighted the impact illicit trade has had on retailers in recent years.
15 November 2013
"If I was Nidge from Love/Hate I’d deal in tobacco, not drugs" was the take away line from Frank Gleeson’s presentation. This is where the criminals are making the big money. Some organised gangs are profiting by as much as €3 million a week selling illegal cigarettes in Ireland. This is not surprising when you consider the difference in price of legal and illegal cigarettes. The price of illegal cigarettes has fallen from €4 a packet to as low as €3, while the current recommended retail price is now €8 – €10.
"Illicit trade," said Frank Gleeson, "is just one of the challenges retailers must now face."
Irsh retail sales peaked in 2008, with 315, 000 employed. This growth was linked to economic prosperity, business investment, the construction boom and unprecedented levels of disposable income. Today 50,000 jobs have been lost. Sales are down 25% from peak and the outlook remains challenging and uncertain. Weak consumer confidence is the real source of the problem for retailers.
Ireland’s legitimate cigarette market has shrunk from 6.7 billion in 2000 to 4.3 billion cigarettes in 2010, with no corresponding drop in smoking prevalence rates. Industry sources suggest that over 1.8 billion cigarettes smoked in Ireland every year are now sourced from the black market. Increasingly prevalent phenomenon of "illicit whites" – legitimately manufactured cigarettes smuggled without payment of excise duties. These are of identical quality, taste and packaging – with none of the concerns about questionable contents.
They have an enormous production capacity in Middle East and Eastern Europe – now replacing original Chinese dominance.
76% of seizures in Ireland in 2012 were "illicit whites."
There are now smaller, more discreet forms of smuggling fast replacing the large-scale container shipments. This poses further challenges for detection and interception.
Frank Gleeson thinks that a better system for fuel would see price equalisation and a rebate system. New legislation is good but more needs to be done.
Other counterfeit products are also a continuing problem. According to An Garda Síochána, clothing is the most common item produced and sold by counterfeiters with individual items being produced in the Far East at a cost often as low as 50 cent per garment.
Illicit trade impacts on jobs, communities, public safety and security and government revenues.
Retail Ireland have a number of solutions that Frank Gleeson outlined including; investment in law enforcement resources, strict control and regulation of street markets promote awareness and cooperation amongst the business community and a vigilant public, financial rewards for the public providing information, enhance penalties and deterrents, consider criminalising the purchase of illicit goods.