The tobacco industry is continuing its streak of pushing the Government to increase regulation and taxation on its new golden goose: smoking-alternative products.
British American Tobacco (Bat) is warning the Government that the State’s illicit vape trade will thrive unless the excise tax on vapes is urgently rolled out alongside “strong enforcement measures”.
Bat has also labelled Health Service Executive plans to carry out 40 inspections along the vaping supply chain each year as “not sufficient given the size of the market and the scale of the illicit” problem.
“If implemented properly, the tax can help deliver on public policy goals, but without strong enforcement, there’s a real risk it could unintentionally further fuel criminal trade,” said Bat Ireland country manager David Melinn.
But why?
Bat noted a KPMG report, which was referenced in the Government’s tax strategy group papers, saying the illicit vape trade estimates account for up to 40 per cent of the Republic’s €550 million vape market.
The report, released to The Irish Times under the Freedom of Information Act, was carried out on behalf of Hale Vaping. It estimates the size of the illicit trade as between 34 per cent and 45 per cent of the market.
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The report recommends a tax stamp regime that would increase the price of vaping products, which is expected to lead to a “decline in overall legal market volume vaping demand” but will also minimise the illicit trade.
This illicit trade represents lost revenue for tobacco companies, which are looking to “actively migrate” customers to smokeless products.
It is no surprise that Bat is also behind one of the largest vaping brands in the world, Vuse, as well as having a hand in the nicotine pouch industry, too, with the Velo brand.
The excise on vapes was expected to be introduced in mid-2025, but is facing delays. With a potential vape flavour ban on the horizon, the sector is warning that, without enforcement, “Ireland risks becoming an even greater target for criminal smugglers”.
