The Irish Republican Army (IRA) and organised crime are becoming major players in the Australian cigarette business, according to several newspapers.

The Irish Independent reports a senior figure in the South Armagh Provisional IRA has been arrested in Spain in connection with illicit tobacco, whilst The Times says organised criminals in Manchester now represent 1.3 percent of the Australian market.

Australia already has standardised, non branded packaging for cigarettes a policy known as plain packaging . Ireland is phasing them in and this is believed to be the reason the IRA have found it easy to enter the market. The policy makes anti forgery packaging designs illegal so they can no longer be used as a way of protecting consumers from illegal products.

Spanish police have already detained ex IRA bombers Leonard ‘Bap’ Hardy, originally from west Belfast, and his wife Donna Maguire. Whilst she was released he is now being accused of consorting with a Malaysian businessman to flood Australia with cheap cigarettes in plain packets.

Over the Irish Sea in Manchester the Police are investigation a criminal gang said to be linked to a company called JSS Tobacco. The company s registered office is empty and their company secretary was a third party service acting on behalf of a businessman in Dubai. A Police Assistant Commissioner working on the case told The Times it was one of the largest organised crime set ups in relation to international tobacco importation . The smuggling operation they have already uncovered is said to be worth 45m.

The British government has now announced it is to rush through legislation to bring in plain packaging. This had led to concerns smugglers will also be able to take advantage of the lucrative UK market. In order to protect their businesses tobacco firms are now considering suing the British government for theft of intellectual property in a move that could cost the taxpayer 11bn.

South Armagh IRA already make a fortune from smuggling and fraud. Their principle businesses are the moving of petrol from the Republic of Ireland to the UK, where it is more highly taxed. They also use EU subsidies as a source of revenue by moving animals and produce from one side of the border to the other to double claim.

Coles importing cheap cigarettes from germany and selling them at discount prices

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The grocery giant has priced the “home brand style” packs of 25 cigarettes at around $11 almost $4 a pack less than Australian made Winfield and other leading brands.

They are believed to be the cheapest on the market since the federal Government raised cigarette taxes by 25 per cent in April.

The cigarettes are labelled “Made for Australia”. Only in smaller letters on the side of the packs does it reveal “Made in Germany”.

The packs carry unfamiliar names such as Bayside, Deal, Harvest and Tradition and are being promoted by Coles as a cheaper alternative to well known brands.

Coles began selling its discount line in November last year.

It refused to reveal how much money it was making out of the deal with its German manufacturer Von Eiken and Australian tobacco wholesaler Richland Express.

“Coles has introduced a small number of branded cigarette lines sourced from overseas, available exclusively in our stores,” a Coles spokesman said. He said the deal was established to offer more choice for customers, not to undermine the federal Government’s cigarette tax.

But a Coles employee, who did not want to be named, said she had been told to “push the overseas cigarettes” to customers struggling with higher prices after the tax rise.

“When customers come in and complain that their usual cigarettes are too expensive we suggest they try one of the new ones, like Tradition,” she said.

“I have been selling cigarettes for four years now. Lately I have noticed people just want the cheapest ones.”

The move, which positions Coles to profit when mandatory plain packaging of tobacco products is introduced in 2012, has outraged anti tobacco campaigners and health experts.

“It really underlines the need for the Government to introduce a floor price for cigarettes, which is a price you can’t go below,” University of Sydney Professor of Health Simon Chapman said.

Research from the Cancer Council of NSW shows 2.9 million Australians smoke on a daily basis. Cancer Council of NSW program manager Anita Dessaix said Coles was being “sneaky”.

“Smoking has been trending downward we really want to see tobacco control strategies heading in the right direction, and this is sneaky and disappointing,” she said.

Rival supermarket giants Woolworths and Franklins said they would not follow the example of Coles.

Richland Express spokesman Paul Daly said “I think this is the evolution of the industry and I think very soon all tobacco products will be manufactured overseas.”

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