From: Belfast Telegraph
A burgeoning tobacco smuggling trade in Northern Ireland is threatening to close one in seven corner shops in the region, new research has indicated.
Cheaper cigarette prices elsewhere in Europe makes the region a magnet for criminals looking to undercut legitimate traders and has left almost 200 of 1,300 store owners contemplating pulling the shutters down for good, according to the study by the Tobacco Retailers’ Alliance (TRA).
Around 15% of corner shop/convenience store owners now believe they are under threat of closure – more than double the 6% reported in a similar survey by the Alliance last year.
The latest TRA assessment of the trade found that more than a third of businesses (35%) have considered laying off staff.
The TRA claims high taxation on tobacco products in the UK makes the country attractive for smugglers, noting that of the average £8 cost for a packet of 20 cigarettes, more than £6 of it is tax. Criminals selling a pack of cigarettes for half the retail price can still make more of a profit than legal traders, the organisation said.
Ballymena shopkeeper John McKeown, the Northern Ireland spokesman for the TRA, said: “These results show that tobacco smuggling is not only a threat to the livelihoods of independent retailers but one that continues to worsen,” he said.
“The high levels of tax on tobacco mean that a smuggler selling at half the price I charge will make more money selling his tobacco here than almost anywhere else in the EU. The government needs to allow tax levels in the other member countries to catch up with those in the UK so that smugglers do not see the UK as the most profitable place to ply their illegal trade.”
Despite growing uncertainty among Northern Ireland shop keepers, traders in other parts of the UK are facing a bleaker outlook. In London almost a third of independent retailers (30%) are considering closure, with more than half (56%) contemplating redundancies. The UK average is 17% considering closure and 40% looking at making job cuts.
Mr McKeown also raised concerns about the potential of the EU banning certain tobacco products from the shelves in the future. “If the EU bans these products, it will play in to the hands of the smugglers who will happily be able to provide them to anyone that wishes, no matter what their age,” he said. “This will affect the livelihoods of independent retailers across the UK and ensure that the criminal activity of tobacco smuggling blights our communities for years to come.”
Meanwhile, Glyn Roberts, chief executive of the Northern Ireland Independent Retail Traders Association, said smuggling was becoming an increasingly worrying problem and there was a need for a stronger partnership approach between the Government, police and retailers to tackle it. He said: “The community need to realise, if you buy smuggled or stolen tobacco, you are directly supporting organised crime and undermining local independent retailers.”
