EXCISE DUTY: When hitting "the old reliables", the Minister for Finance, Mr McCreevy, hit Irish smokers the hardest, with a 10 per cent increase in cigarette prices.The average cost of a packet of 20 cigarettes will now rise by 50 cent, with a pro rata increase on other tobacco products.
The response from the tobacco industry was one of fury, with the Irish Tobacco Manufacturers' Advisory Committee claiming the price increase would push up inflation and boost tobacco smuggling.It said high levels of tobacco tax made Ireland an attractive target for tobacco smugglers. Last year Customs and Excise officials seized 161 million cigarettes with a retail value of €39 million.
John Players & Sons said last night it was "disappointed at the Government's decision to increase tobacco tax by more than double the rate of inflation", which currently stands at 4.5 per cent.
Mr Liam Peters, managing director of John Players & Sons, called the increase "a completely unfair burden on smokers" and said excessively high tobacco tax encouraged smuggling and cross-Border trading in cheap cigarettes.
"The growth of a black market also damages the economics of retailing in Ireland by undermining the livelihood of legitimate tobacco retailers," Mr Peters said. A pack of 20 John Player cigarettes will now cost €5.71.
The Office of Tobacco Control welcomed the 50 cent increase. Chairman Dr Michael Boland said it would have preferred an even larger price increase. The Irish Cancer Society also would have preferred higher increases. The Minister "has also wasted a valuable opportunity to encourage current smokers of every age to quit," Ms Norma Cronin, Irish Cancer Society's anti-tobacco consultant, said.
Taxes on spirits and spirit-based "alcopops" were increased but there was no price increase on beer. A standard measure of spirits will go up by 20 cent (including VAT) and the cost of a bottle of alcopops will go up by 35 cent. The Vintners' Federation of Ireland was outraged by the increases.
