IRISH SHOPPERS heading abroad are killing Irish jobs, undermining local businesses and robbing the Irish economy of millions of euro in unpaid taxes, small business group Isme claimed yesterday.

Isme also condemned what it said was the "blind eye" attitude of the Government and customs to the level of consumer products brought into the State by Irish people returning from foreign shopping trips, particularly in US cities, in the run-up to Christmas.

According to Isme chief executive Mark Fielding, it is estimated that more than €1 billion worth of products are brought into the country by Irish shoppers from foreign destinations "with little or no intervention by customs excise". He said the loss to the exchequer was in excess of €300 million.

"As Irish retail sales plummet, the level of product being brought in illegally, tax-free, is having a serious impact on local shops and suppliers who are being undercut and losing out on business.

"The Government, true to form, has turned a blind eye, which encourages this illegal activity and once more sells small business down the river. Each illegally-filled suitcase is another job lost."

Mr Fielding said the association believed that freedom of choice was essential for all shoppers, but he added that it was "galling" that the customs authorities were not clamping down on the levels of products that were brought into the country illegally.

"If a small business was importing stock in a similar fashion, the full rigour of the law would be applied to them. We are seeking that the same principle is applied in this scenario."

Some 291,000 Irish shoppers travelled to New York last year and spent an estimated €1,900 each, resulting in a total spend of €553 million.

As both the dollar and sterling declined in value against the euro in the early part of the year, Irish shoppers continued to travel abroad for shopping bargains during 2008.

However, retailers in the US, the UK and Ireland are all feeling the pinch due to the global economic slowdown.

According to the latest figures from the Central Statistics Office (CSO), Irish retail sales posted their largest ever annual decline in August since 1984, with the overall volume of retail sales falling 6 per cent.

Footfall figures for September released last week by Experian show that the number of shoppers on the streets is down 7.7 per cent compared to the same month last year, pointing to a tough Christmas shopping season ahead.