Big Tobacco Earns €104m in Profits From Sales in Ireland
Earlier the information about how much tobacco companies earn in Ireland was hidden from public but today the value of the Irish market to Big Tobacco has been revealed for the first time.
A new study says that the Big Tobacco in Ireland in 2011 made €227 on sales and profits of €104m. Moreover, after excise duties they enjoyed profit margins of up to 55% which is 3 times more than achieved food and drink manufacturers.
The study was conducted by Dr Robert Branston of the University of Bath. He said that Ireland is one of the easiest markets in Europe for cigarette companies to get a profit. 79% of the cost of a cigarettes package goes to the state in form of taxes and the rest is profit for manufacturers.
The study showed that leading tobacco maker Japan Tobacco International, which produces Benson & Hedges and Silk Cut, sold €112m worth of tobacco to Irish consumers in 2011.
Imperial Tobacco, the maker of Davidoff and Richmond, made €80m. British American Tobacco which produces famous Lucky Strike cigarettes made about €35m. As to new competitors, these days it is hard for them to enter the Irish market due to severe control on tobacco ads.
Dr Branston said that while Ireland earned €1.42bn in taxes on tobacco during 2011, this amount dropped by €2bn cost of caring for smoking-related diseases.
Tobacco companies can continue to modify premium prices and make big profits because their products are very cheap to make and competition in such a highly regulated market is very limited. What makes tobacco companies to fight tobacco control measures is great profitability.
The study was commissioned by the Irish Heart Foundation and the Irish Cancer Society. They say that the Department of Health is allowing these big profit margins through ineffective tax policies. They require tobacco taxes to be increased.
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