Tobacco companies are being allowed earn substantially higher profits in Ireland than in many other EU countries, it has been claimed.

The Irish Heart Foundation and the Irish Cancer Society told the Oireachtas Health Committee today that tackling this issue could net the Government €150 million a year and curb the tobacco industry's ability to recruit young smokers.

The two campaigning groups said tobacco manufacturers have been earning around €1 more on a pack of major brand cigarettes here than in the UK because the Irish tax take is lower - despite the huge cost burden smoking places on our health services.

Last year, total cigarette tax take in Ireland was €1.36 billion. But at current smoking rates, tobacco-related illness will cost the State €23 billion over the next 10 years - almost a billion a year more than is received in tax, the Committee was told.

"Apart from causing 5,200 deaths in Ireland every year, the tobacco industry is costing the taxpayer a fortune. A good way to start recouping some of this money is to transfer their extra profits to the exchequer," said Irish Heart Foundation Head of Advocacy, Chris Macey.

"We are in the crazy situation where the tobacco industry makes extraordinary profits on a packet of cigarettes. These profits are then reinvested to undermine Government policies designed to reduce the number of smokers in Ireland, said Kathleen O'Meara, Head of Advocacy and Communications at the Irish Cancer Society.