Vape tax hike will pile pressure on small retailers already struggling with record costs, warns industry body

Budget 2027 risks rewarding rogue operators while legitimate retailers are left to shoulder spiralling costs

• Retailers say the 20c per mililitre increase in E-Liquid Products Tax announced in Budget 2027 will add further pressure to businesses already facing spiralling operating costs.
• Vaping products are particularly important to small and rural retailers, typically generating margins of 40–50%, meaning the additional tax burden will hit businesses already struggling to keep their doors open.
• RVI warns the Budget risks making regulated vaping products less affordable, handing an advantage to illegal sellers while undermining access to products used by adults trying to quit smoking.

An RVI spokesperson said:

“Small retailers are already under enormous pressure from rising wages, energy bills, licensing fees and the general cost of keeping the doors open. Now the Government is looking to pile another tax increase on top of that.

Vaping products are an important part of the business for many independent and rural retailers. These are people who are playing by the rules, ensuring age checks, selling safe, regulated products and doing everything they can to operate responsibly. They should not be the ones punished while rogue sellers continue to operate outside the rules.

Government needs to understand that every extra cost makes it harder for legitimate retailers to compete with illegal sellers. If you make regulated products more expensive while failing to properly enforce the rules against rogue operators, you risk pushing more consumers towards a ballooning illegal vape market.

More than 23,000 adults have already quit smoking with the help of vaping products, while Ireland’s smoking rate remains at 17%. We need policies that help adults move away from cigarettes, not policies that make regulated alternatives less accessible and create more opportunities for the black market.”

Retailers Against Smuggling also issued a statement.

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

• RAS 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.
• The €1 increase expected in Budget 2027 comes despite the previous €1 increase in October 2024 delivering just €22 million in additional tobacco excise revenue in 2025 against an anticipated yield of €69 million, while the notional tax loss from illegal tobacco jumped by almost €100 million, from €550 million to €648 million.
• 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 says Government is penalising legitimate retailers already facing soaring business costs, while failing to tackle a booming illegal tobacco market and handing it to criminal gangs.

RAS National Spokesperson Benny Gilsenan said:

“The Government was warned exactly what would happen, and 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. 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.

The Tánaiste himself has said he knows higher tobacco taxes can push people towards the black market, so why are we doing this again? It doesn’t make sense. You can buy the same cigarettes abroad, in duty-free or through illegal channels for a fraction of the price here, in some cases around a quarter or even a fifth of the Irish price. That is an enormous incentive for people to look outside the State.

Retailers are already struggling with the soaring cost of running a business. Now we are being told to compete with people selling cigarettes for a fraction of the price, while the Government has failed to properly tackle the black market.

The Government has made a hames of this. They are putting the price of legal cigarettes up again, pushing more customers away from Irish shops and making life easier for criminals. We warned them this was coming. They had all the figures in front of them. They chose to ignore the warning, and it is retailers, taxpayers and communities who will end up paying for it.”