TOBACCO MANUFACTURERS HAVE reacted angrily to the 40 cent excise hike on a packet of cigarettes.

The price of a packet of cigarettes will hit €10 for the first time at midnight after the decision to add 40 cent to a packet of cigarettes.

That decision has been slammed by manufacturers and lobby groups, who all say it will play into the hands of criminals.

Igor Dzaja, General Manager for lobby group JTI Ireland said: “One in four of all cigarettes consumed in Ireland avoid Irish tax, with the Exchequer estimated to be losing €240 million annually at a time when taxpayers are being asked to pay water charges.

“This move is counterproductive, as the Exchequer risks losing revenue at the expense of illegal trade and criminality in local communities. It will be warmly welcomed by cigarette smugglers who already see Ireland as a lucrative target.”

Cigarette company John Player were equally damning, saying they were “taken aback” by the increase.

“This is not the time to be further incentivising the criminal community. A parallel illegal tobacco supply chain exists in this country that pays no tax at all to the Irish Exchequer. An illegal tobacco factory was only discovered by Enforcement Officers in May this year.

Smugglers will certainly party tonight. This is a great day for ‘South Armagh Duty Free’.

Health

However, the increase has been welcomed on health grounds.

ASH Ireland, an anti-smoking group, says that price is the most important factor in encouraging smokers to quit.

Dr Ross Morgan, Chairman of ASH Ireland said today that price increases needed to continue.

“If the Government is to achieve its objective of establishing a smoke-free Ireland by 2025 then it must consistently increase the price of tobacco.

“Significant inroads have been made in regard to smoking prevalence over the past 10 years with current levels at approximately 21.7%, down from 29% in 2004.

“It would be possible to reduce smoking levels by a further 10% at least in the next 10 years if there are consistent and significant increases in tobacco price, combined with other measures such as the introduction of standardised packaging”.

ASH say that they had hoped for a VAT cut on nicotine-replacement products.

In the chamber

Speaking in the Dáil tonight, Taoiseach Enda Kenny said that the government was “mindful” of the illicit tobacco trade.

Socialist leader Joe Higgins, however, called the government “hypocritical” on the issue.

Keep up with all of our Budget coverage here