Ireland: Retailers hurt by illicit trading
26 April 2013
Posted by: Author: Independent.ie
Retailers called for international co-operation to combat the trade of illegal fuel, tobacco, digital entertainment and pharmaceuticals
The illicit trade of counterfeit goods is costing the economy up to 1.5 billion euro a year, a study claimed.
Retailers warned the impact of black market is worse than previously thought with Irish businesses and exchequer losing out to organised crime.
They called for harsher penalties, a public awareness campaign and international co-operation to combat the trade of illegal fuel, tobacco, digital entertainment and pharmaceuticals.
Frank Gleeson, of Retail Ireland, said: "The financial impact of illicit trade identified in this report is even worse than suggested by our previous research. Whilst the Government has recognised the seriousness of the problem, there is a lot more that it could do to help Irish retailers who are suffering lost sales to illegal operators.
"Consumers also have a role to play in realising that buying cheaply-priced goods sold informally or door-to-door is not a victimless crime, but one that is damaging the Irish economy and putting legitimate distributors out of business.
Tax specialists Grant Thornton and Retail Ireland jointly published the report entitled "Illicit trade in Ireland: Uncovering the cost to the Irish economy".
It calculated the estimated financial losses to the exchequer are equivalent to 12% of the total interest bill of the 8bn euro the Government expects to pay on Ireland's national debt in 2013.
The figures include uncollected taxes of as much as 937m euro and 547m euro in losses to retailers and businesses such as record companies. The figures include up to 466m euro lost from fuel laundering and 691m euro from counterfeit cigarettes.
Elsewhere, illegal downloads of music, computer games and computer software are said to cost in the region of 269m euro, partly leading to financial difficulties and job losses at companies such as HMV, Golden Discs and Game. And it stated almost 60m euro is lost to the exchequer by consumers buying counterfeit drugs rather than bone fide exports from pharmaceutical companies based in Ireland.
Brendan Foster, at Grant Thornton, said illicit trade is costing the state hundreds of millions of euro at a time when every cent of tax revenue is vital to the recovery of the public finances. "Legitimate businesses are finding it impossible to compete against fraudulent goods being sold by organised criminal gangs whose illegal actions must be stamped out to avoid further business closures and job losses," he said.