Grant Thornton Illicit Trade Survey Findings March 2014

Grant Thornton
Illicit Trade Research Draft 1
A Presentation Prepared For:
February 2014
S14-055
MMcL/MG
Supplementary Survey Findings
March 2014

2
This presentation sets out findings from two
surveys conducted for Grant Thornton as
inputs into their pioneering study on
Illicit Trade – An Irish and Global Challenge.
The Grant Thornton report was published in
March 2014.
A full copy of the report can be downloaded
from:
http://www.grantthornton.ie/IllicitTrade2014
Illicit Trade Report

3
A. Background & Objectives
Section 1: Omnibus/ Consumer Research
Omnibus: Research Methodology
Omnibus: Profile of Sample
Omnibus: Findings
Omnibus: Conclusions
Section 2: Retailers Research
Retailer: Research Methodology
Retailers: Profile of Sample
Retailers: Findings
Retailers: Conclusions
Table of Contents

4
In 2013 Grant Thornton published the ‘Illicit Trade in Ireland
Report’ which investigated the cost of illicit trade to the Irish
economy. Using this current research Grant Thornton wish to
delve deeper and investigate further the findings of the 2013
research.
To provide up-to-date data and new perspectives on the 2013
research, the 2014 research was conducted with 3 different
samples.
To gauge the opinion of the Irish population towards illicit trade
questions were placed on the Amárach Research’s February
omnibus.
Additionally 200 face to face surveys were conducted with retail
shop owners and mangers across the country. These shops
sold either alcohol, tobacco, fuel or food or a combination of all.
A. Background & Objectives

7
A number of questions were placed on the Amárach Research
February omnibus. The omnibus survey is a syndicated survey
whereby clients can include questions within the survey.
A total sample of 1,000 was achieved with quotas set on gender,
age, social class and region to achieve a sample aligned with
national population. Due to the high proliferation of the internet
among the Irish population, the Amárach Research omnibus is
completed fully online.
Interviewing fieldwork dates were 11th – 18th February.
Omnibus Methodology

8
B. Sample Profile
Male
Gender Age Social Class Region
% % % %
Female
16-24
35-44
ABC1
F50+
C2DE
F50-
Dublin
Rest of
Leinster
Munster
Conn/
Ulster
25-34
(Base: All Irish adults – 1,000)
55+
49
17
48
28
51
22
52
26
19
2816
18
26
Quotas were set to ensure that the sample attained is aligned to the Irish population as of
the 2011 Census. Any sampling error is corrected with minor data weighting.
45-54

9
4
4
10
11
13
36
22
25
45
46
39
32
69
63
35
32
26
11
Tobacco
Digital Copyright Material
Alcohol
Fuel
Pharmaceutical
Food
Illegal Trade Awareness
(Base: All adults 15+ – 1,000)
Q1: Do you think that there is illicit trade taking place in the following
sectors?
I don’t think
illicit trade is
going on
I think some
illicit trade is
going on
I think there is
a lot of illicit
trade going on
Don’t
know
5
8
11
11
21
21
(87)
(91)
(80)
(78)
(65)
(43)
Total;
Some + A
lot

10
Perceived Changes in Illicit Trade
High increase (5)
Slight increase (4)
Slight decrease (2)
High decrease (1)
38 33
22 18 16
8
30 29
32 38 36
30
6 7
11
7 5
10
6 5 5 4 4 3
%
54%
%
38%
%
52%
%
56%
%
62%
%
68%
(779) (433)(652)(798)(875)(912)
Q2: Do you think that there has been an increase or decrease in illicit trade across
the following sectors?
Pharma-
ceuticals
Alcohol FoodDigital
Copyright
Tobacco
Base:
Fuel
Mean: 3.6 3.33.53.63.83.9
Neither/nor 30 4938332619

11
Mean
3.2
3.1
2.8
2.6
2.6
2.3
13
18
31
36
39
44
5
5
6
10
9
15
37
40
43
40
39
33
45
37
20
14
14
8
Ease of Acquiring Illicit Goods
Q3: On the scale below how easy or difficult do you feel it is to
purchase or acquire illicit products in the following categories?
Very
Difficult (1)
Somewhat
Difficult (2)
Somewhat
Easy (3)
Very
Easy (4)
Digital Copyright
Material (875)
Tobacco (912)
Alcohol (798)
Pharmaceutical (652)
Food (433)
Fuel (779)

12
10 8 7 7 4 5
29
21 24 23
16 16
27
25 26 25
24 23
34
46 44 44
55 56
Acceptability of Purchasing Illicit Goods
(Base: All who think there is illicit trade taking place in each sector)
Very
acceptable (1)
31%
21%20%
30%29%39%
Q4: How acceptable or unacceptable do you feel it is to buy/acquire illicit products
in the following categories?
Somewhat
acceptable (2)
Somewhat
unacceptable (2)
Completely
unacceptable (1)
% %%%%%
(798) (652)(779)(433)(912)(875)Base:
Pharma-
ceuticals
Alcohol FoodDigital
Copyright
Tobacco Fuel
Mean: 1.9 1.71.71.91.92.14

13
Government Fight Against Illicit Trade
Q5: Do you think the Irish government is doing too little, too much or about the right
level to combat illicit trade in the following sectors?
Pharma-
ceuticals
Alcohol FoodDigital
Copyright
Tobacco Fuel
55 53 51 48 45 44
24 24 30 27
27 32
6 6 4 7 9 7
Too Little
About the right
level
Too Much
Don’t know 15 1818181814
% %%%%%
(779) (433)(875)(798)(652)(912)Base:

14
Retailers Knowingly Selling Illicit Goods
Q6: Do you think licenced retailers knowingly sell illicit goods in the
following categories?
%
46%
30%
24%
YesNo
Fuel
% %
% % %
Pharma-
ceuticals
TobaccoAlcohol
FoodDigital
Copyright
44%
30%
26%
43%
26%
31%
35%
32%
33% 28%
37%
35%
21%
38%
41%
Don’t know
YesNo
Don’t know
YesNo
Don’t know
YesNo
Don’t know
YesNo
Don’t know
YesNo
Don’t know

15
Personal Acquisition of Illicit Goods
Q7: Have you ever knowingly bought or acquired an illicit good in the following
categories?
Digital Copyright Material
Tobacco
Alcohol
Pharmaceutical
Food
Fuel
Don’t
know
9
6
9
8
10
7
56
71
76
86
84
87
35
23
16
6
6
6
No Yes

16
4
1 4
9
26
7
4
5
6
2
14
2811
11
13
16
11
24
16 19 18
23
9
1014 14 17
10 8 5
Frequency of Purchasing Illicit Goods
(Base: All who have made illicit purchases)
Everyday 10%
35%
40%
11%6%8%
Q8: How often do you buy or acquire an illicit good in the following
categories?
Few times a week
Few times a month
Once a year
% %%%%%
(353) (59)*(60)*(61)*(156)(230)Base:
Pharma-
ceuticals
Alcohol FoodDigital
Copyright
Tobacco Fuel
Only when I have
the opportunity
Once every few
months
*Warning small base size
51 32404249 26

17
Reasons for Purchasing Illicit Goods – I
Q12: For what reasons did you purchase, acquire or stream pirated digital products (e.g Music, E-books,
Movies, TV shows, Live Sports, Games & other software)?
Q10: For what reasons did you purchase illicit cigarettes?
It was cheaper to download or stream
illegally than buy a legal copy the
product
It is convenient to download or stream
movies live sport, music, games and
software for free
Downloading is easy
Movie houses, record labels and
software companies make enough
money
I don’t see any difference between the
illicit product and the legal product
I don’t think I will get caught
I don’t care about the quality, I just
want the product
Don’t know
(Base: All who purchased, acquired or
streamed pirated digital products - 353)
(Base: All who purchased illicit cigarettes - 230)
%
70
43
28
17
16
7
7
7
They were cheaper than normal
cigarettes
I knew someone selling them
Don’t see any difference between illicit
cigs and legal cigs
Tobacco companies make enough
money
I don’t care about the quality of the
product I just want the produce
Don’t know
%
86
26
17
17
6
4
2

18
Reasons for Purchasing Illicit Goods – II
(Base: All who purchased illicit pharma – 61*) (Base: All who purchased illicit fuel – 59*)
Q11: For what reasons did you purchase illicit
pharmaceutical products?
Q9: For what reasons did you purchase illicit
petrol/diesel?
They were cheaper than normal
pharma products
Pharmaceutical companies make
enough money
I knew someone that was selling them
I don’t see any difference between
illicit pharma and legal pharma
products
product I just want it
I was too embarrassed to purchase in
the pharmacy
Don’t know
%
58
25
19
15
9
7
2
8
They were cheaper than normal petrol
or diesel
Don’t see any difference between illicit
fuel and legal fuel
product I just want it
It was convenient to purchase
Fuel providers make enough money
Don’t know
%
53
16
14
14
11
2
21

19
Digital Copyright Material Acquired
(Base: All who acquire digital copyright material : 353)
71
56
34
18
17 14 11
Q13: What type of pirated digital products have you acquired?
Movies Music TV Series Live Sports
eBooks Games Other Software

20
Quality Difference in Legal and Illicit Materials
Q14: Using the scale below, to what extent do you believe there is a difference in quality
between legal and illicit products across the following categories?
Pharma-
ceuticals
Alcohol FoodDigital
Copyright
TobaccoFuel
57
51
48
47
45 41
17
28
15
32
25 20
1 3 2 4 2 2
Poorer quality
Same quality
Better quality
Don’t know 35 3728171825
% %%%%%

21
21
46
21
6
7
Importance of Brand in Decision Making Process
Very important (5)
Somewhat important (4)
%
67%
Q15: How important are brands (I.e. branded products that you know) to you in the
decision to buy a specific product?
Neither/nor (3)
Somewhat unimportant (2)
Not at all important (1) 13%
Mean: 3.7

22
Opinion of Effect of Illicit Trade on Legitimate
Businesses
Q16: Using the options below do you care that illicit trade negatively effects
legitimate businesses across the following categories?
Pharma-
ceuticals
AlcoholFood Digital
Copyright
TobaccoFuel
48 47
41 36
32 32
25
25
31
29 36
26
11 14 16
21 21
31
I care a lot
I care a little
I don’t care at all
Don’t know 12 1112141415
% %%%%%

23
Opinion of Effect of Illicit Trade on Brands
Q17: Using the options below do you care that illicit trade negatively effects brands (I.e.
branded products that you know) in the following categories?
Pharma-
ceuticals
AlcoholFood Digital
Copyright
TobaccoFuel
37 36
28 30 28 24
28 27
34 28 30
25
18 20 23 25 26
37
I care a lot
I care a little
I don’t care at all
Don’t know 15 1416171717
% %%%%%

24
Illicit Trade & Crime
Q18: Do you think that illicit trade supports organised crime in Ireland?
Q19: Do you care that illicit trade supports organised crime in Ireland?
%
72%
21%
7%
Yes
No
Don’t know
Yes 90
6
4
%
No
Don’t know
Illicit trade supporting
crime in Ireland
Do you care that illicit trade
supporting organised
crime in Ireland ?
(Base: All who
think illicit trade
supports crime
723)

25
Don’t
know
Mean
8 3.5
13 3.5
11 3.4
11 3.3
11 3.3
11 3.3
10 3.0
13 2.2
5
5
9
9
9
8
15
25
4
3
4
6
6
5
11
30
25
20
30
25
23
32
25
18
59
59
47
49
50
44
39
14
Opinion on Illicit Trade in Ireland
Q20: To what extent do you agree or disagree with the following statements?
Strongly
Disagree (1) (2) (3)
Strongly
Agree (4)
The ongoing economic crisis is
contributing to illicit trade in Ireland
Counterfeit pharmaceutical products
increase health risks
Illicit trade is a problem in Ireland
Illicit trade cost tax payers money
Counterfeit cigarettes increase health
risks
Illicit trade on tobacco products impacts
negatively on shop owners
Stricter fines and harsher laws will help
diminish illicit trade
Illicit trade is a victimless crime

26
Personal Information Stolen Online
Email accounts
Credit or debit card information
Passwords
Contact details
Bank account information
Unpublished telephone information
Private life information
Employment history
Social service number
Health information
I have never had any of my personal
information stolen
%
15
14
11
8
4
3
3
2
2
2
67
Q21: Have you ever had any of the following personal information
stolen online?

28
Overall the Irish population is most aware that illicit trade is
taking place with Tobacco. 69% think that there is a lot of illicit
trade going on in tobacco.
Digital copyright material such as music, E-books , Movies, TV
Shows, Live Sports, Games & Other Software are seen as the
easiest illicit goods to acquire with tobacco seen as the second
easiest.
39% of the population believe that Digital Copyright Materials are
acceptable to purchase with 29% believing that it is acceptable
to purchase illicit tobacco.
However on the contrary nearly half of the population ‘care a lot’
that illicit trade hurts legitimate food retailers and also
pharmaceutical retailers. They care the least in relation to
tobacco and Digital Copyright material.
Overall it seems that the Irish population is aware of illicit trade
taking place in various sectors. However, they only seem to care
that it effects certain sectors such as food and pharmaceuticals.
Omnibus conclusions

29
Section 2: Retailers Findings

30
A 5 minute long questionnaire was designed to ask retailers and
shop managers about trends and issues in illicit trade in Ireland.
Specifically trends were asked in relation to illicit trade with
regard to tobacco, fuel (petrol and diesel), alcohol and food.
A total sample of 200 shop owners and shop managers was
achieved with quotas set on region to provide an equal sample
from each region.
Interviewing fieldwork dates were 11th – 18th February.
Retailers Methodology

31
63
28 25
37
34
25
26
25
13
25
98
90
68
52
Products Sold in
Store
C. Sample Profile Retailers
Head
Manager
Position within
Retail Operation
Region of
Store
% % %%
Owner
Dublin
Rest of
Leinster
Munster
Conn/
Ulster
(Base: All Retail Owners/Head Managers - 200)
No. of
Employees
1-5
6-10
11-20
21+
Cigarettes
Food
Alcohol
Fuel
(only petrol/diesel)

33
Changes in Volume of Illicit Trade in Past 2 Years
Big increase (5)
Slight increase (4)
Slight decrease (2)
Big decrease (1)
34
10
9
1
28
14
22
11
7 3 5
4
2 1 1 1
(Base: All Retail Owners/Head Managers : 200)
%
31%
%
12%
%
24%
%
62%
Q1: Have you seen an increase or decrease in illicit trade over the past 2 years across
the following categories?
Alcohol FoodCigarettes Fuel
Mean: 3.4 3.13.43.9
No Change:
Don’t know:
51
13
78
5
47
25
28
2
5%6%4%9%

34
Impact On Revenue Due to Illicit Trade
High impact/
Decrease of revenue 44
21
15
2
33
34
33
19
21
43
51
74
2 2 1 5
(Base: All Retail Owners/Head Managers In Stores That Sell Each Item)
% %%%
Q2: What sort of impact do you believe illicit trade has had on your revenues for
the following categories?
(103) (179)(136)(196)Base:
Don’t know
No impact at all
Slight impact/
Slight decrease of revenue

35
Impact Of Illicit Trade on Footfall
High impact/
Decrease in footfall 21
43
32
5
%
Q3: What sort of impact do you believe illicit trade has had on footfall in
your store?
Don’t know
No impact at all in footfall
Slight impact/
Slight decrease in footfall
* Caution small base size
25
24
18
8
12
28
16
26
1-5
6-10
11-20
21+
Dublin
ROL
Munster
Conn/Ulster
%
Shop size(Base: All who
said high impact/
decrease in
footfall-41*)
Region

36
Impact Of Illicit Trade on Staffing Levels
High impact/
I have had to let staff go
7
29
62
3
%
Q4a: In your opinion what sort of impact do you believe illicit trade has had on staff
levels in your store?
Q4b: How many staff have you had to lay off in the past two years?
Don’t know
No impact at all on staff
levels
Slight impact/
I have had to reduce hours
7
36
21
7
7
14
7
1
2
3
4
5
6
10
Mean =
%
Staff Laid Off
(Base: All who
had to lay off
staff - 14*)
4 staff members

37
Irish Government’s Handling of Illicit Trade
(Base: All Items Sold In Store)
Q5: Do you think the Irish government is doing too little, about the right level or
too much to combat illicit trade in the following sectors?
2 – 4 4
77 72
54
23
Too Little
Too much
About right
(All who sell - 103) (All who sell - 179)(All who sell - 136)(All who sell - 196)Base:
% %%%
29% 44%20%17%
Don’t know 13% 28%8%5%

38
52
32
11
4
11
Importance of Branding
Very important (5)
%
Q6: How important do you believe brands (E.g. branded products you
sell) are in the decision to buy a specific product?
(Base: All who
see branding as
important - 167)
84
81
88
80
1-5
6-10
11-20
21+
%
Shop Size
84%
Neither/nor (3)
Not important at all (1)
4.3Mean score
Don’t know

39
Licenced Retailer Knowledge of Selling Illicit
Goods
Q7: Do you think other licenced retailers knowingly sell illicit goods in the
following categories?
47
36 42
59
36 31 23
13
Yes
No
% %%%
Don’t know 35% 29%34%18%

40
45
19
27
5
1
5
Impact of Plain Packaging on Illicit Trade of
Tobacco
High increase in illicit trade of tobacco
%
Q8: What impact do you believe the introduction of plain packaging will have on
illicit trade in cigarettes?
(Base: All who
said increase in
illicit trade - 127)
57
65
71
60
1-5
6-10
11-20
21+
%
Shop Size
64%
4.1Mean score
Don’t know
Slight increase in illicit trade of tobacco
No impact on illicit trade of tobacco
High decrease in illicit trade of tobacco
Slight decrease in illicit trade of tobacco

41
Areas of Illicit Trade Growth
Q9: Do you think that there are new categories where illicit trade is a growing problem?
57
25
15
5
11
32
Cigarettes
Fuel
Alcohol
Food
Other
Don’t know
%

42
Involvement of Organised Crime In Illicit Trade
Highly Involved 70
23
2
6
%
Q10: To what extent do you believe organised crime is involved in illicit
trade in general?
Don’t know
Not Involved at all
Somewhat Involved
71
78
65
56
54
72
88
66
1-5
6-10
11-20
21+
Dublin
ROL
Munster
Conn/Ulster
%
Shop size(Base: All who say
organised crime is
highly involved in
illicit trade - 140)
Region

43
Cost of Compliance Burdening Business
(Q.11)
Q11: Is the cost of compliance with licencing, regulations on the sale of specific products
and other Government red tape a burden on your business? E.g where you can display
cigarettes in store, licencing to sell alcohol.
77
69
75
64
60
68
68
92
1-5
6-10
11-20
21+
Dublin
ROL
Munster
Conn/Ulster
%
Shop size(Base: All who say
the cost of
compliance with
licencing and
regulations on the
sale of specific
products’ is a burden
on their business -
140)
Region
%
72%
7%
21%
Yes
No
Don’t know

45
The biggest increase in illicit trade is coming from that of tobacco
with 62% of retailers saying that they have seen an increase in the
illicit trade of cigarettes over the past 2 years. Food has the least
increase with 78% of retailers saying they had seen no change.
This increase in illicit trade is having an impact on business with
77% saying that it has had an impact and a decrease on revenue.
Of the retailers who sell tobacco (77%) and fuel (72%) nearly a
quarter of each feel that the government is doing too little to combat
illicit trade.
Similar to the consumer survey , retailers also think that cigarettes
are the most popular illicit goods being sold in shops with 36% of
other licenced retailers selling illicit tobacco goods.
64% of retailers believe that the introduction of plain packaging
cigarettes will lead to an increase in the illicit trade of tobacco.
72% of retailers survey said that the cost of compliance on certain
products is a burden on their business which suggest Government
may need to ease the level of red tape around selling certain
products.
Conclusions

Grant Thornton Illicit Trade Survey Findings March 2014

Grant Thornton Illicit Trade Survey Findings March 2014

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Grant Thornton Illicit Trade Survey Findings March 2014