Tobacco tax hike an 'enormous incentive' for people to purchase outside Ireland - Retailers

Retailers say the €1 tobacco tax hike expected in Budget 2027 will drive customers "away from local shops and into black market".

The Retailers Against Smuggling group says Government has "blatantly ignored" warnings that further tobacco tax increases will push more consumers away from Irish retailers towards cheaper tobacco sourced abroad, duty-free and through the black market.

Amárach polling commissioned by RAS before the Budget found that 43% would look outside the State for tobacco if prices increased again, compared with just 19% who would continue buying from Irish retailers.

This comes on top of more than half of tobacco consumers (55%) already buying some or all of their tobacco outside Ireland.

RAS National Spokesperson Benny Gilsenan said the Government had been "warned" what would happen, however "they’ve gone ahead with another tobacco tax increase anyway".

"More than half of tobacco consumers are already buying some or all of their tobacco outside Ireland. Surely that tells you something," he said.

"Now they are putting another €1 on a packet, with some packets set to cost more than €20. The more you put up the price here, the more people will look elsewhere," he believes.

He described a €1 as an "enormous incentive" for people to look outside the State.