Plain packaging introduction will cost jobs, new report claims
The National Federation of Retail Newsagents in Ireland says new report warns of job losses due to plain packaging
3 December 2013
Concerns of the National Federation of Retail Newsagents (NFRN) Ireland, that plain packaging of tobacco products will place jobs and tax revenues at stake, have been supported by a new report released today ( 03 December).
It is estimated that plain packaging will cost up to 1,900 jobs in the study by German consultants Roland Berger. It is believed that approximately 88% of the jobs lost will not be in the tobacco sector but in the rest of the economy. Job losses will be triggered by the loss of €125 million in tax revenue and the knock-on impact this will have on the economy.
The Munich based consultant forecasts that due to plain packaging all legal segments of the tobacco market in Ireland will lose significant market share whereas the illicit market could grow by up to 40%.
Commenting on the report, which is being launched at an event hosted by NFRN Ireland today, NFRN Ireland President Joe Sweeney said: "NFRN Ireland has repeatedly expressed its support for government measures to curb smoking and retail newsagents are hugely compliant with all restrictions and regulations around the sale of tobacco products."
While Sweeney supports the Minister for Health’s decision to discourage smoking, particularly in young people, he warns that the Minister must tread a fine line between preventing smoking and driving people to the black market.
Sweeney added: "Minister Reilly’s heart may be in the right place on tobacco; but his government’s failure to address the growing criminal fuelled trade in tobacco products shows a need for much more joined-up thinking."
Recent reports by both KPMG and London Economics have shown that one year after the introduction of plain packaging in Australia, there has been no noticeable effect on smoking levels, but there has been a huge increase in counterfeit and smuggled cigarettes witnessed in the country.
Sweeney believes that the illicit trade has already benefited from high tax increases on cigarettes in Ireland saying: "The illegal trade has flourished as a response to huge tax increases on cigarettes and has been facilitated by farcically low penalties and feeble enforcement such as just two scanners to cover eight national ports."