Tag: Australia

  • Australia Launches National Taskforce to Combat Illicit Tobacco Crisis

    Australia Launches National Taskforce to Combat Illicit Tobacco Crisis

    With Australia’s demand for black-market tobacco surging in recent years, driven by steep tax hikes on legal products, authorities have announced a new multi-agency taskforce set to target the organized criminal networks behind it. The Illicit Tobacco National Disruption Group, led by the Australian Border Force, will unite federal, state and territory police with agencies including AUSTRAC, the Australian Criminal Intelligence Commission, the ATO, and Services Australia.

    Backed by almost A$190 million ($124 million) in new funding aimed at dismantling smuggling and distribution operations, the crackdown will examine every stage of the supply chain, from pre-border smuggling to warehouse storage and local street sales. The taskforce will focus on mid-level criminals who import, distribute, or sell illegal tobacco, while also targeting financial flows that sustain the trade. Home Affairs Minister Tony Burke said the coordinated approach was vital as illicit tobacco networks were increasingly tied to broader organized crime.

    “The same criminal groups are involved in organized tobacco, arson and the drug trade,” Burke told the ABC’s Insiders program. “If there’s a cohesion of threats and a convergence of threats, there needs to be a convergence of protection in responding.”

  • Economist Puts Australia’s Illicit Tobacco Crisis Squarely on Tax Rate

    Economist Puts Australia’s Illicit Tobacco Crisis Squarely on Tax Rate

    Australia’s illicit tobacco market has gone over the “Laffer Curve,” where excessive taxation leads to lower overall revenue, according to numerous experts, including U.S. economist Dr. Arthur Laffer. “It’s not working at all. Your taxes are way too high,” he told 7.30 News. “Australia has raised its tax rates on tobacco so high that people have found illicit products.”

    According to internal industry data, illicit products now account for 64% of all tobacco and 82% of total nicotine consumed in Australia. The black market is valued at nearly $10 billion, coinciding with a sharp drop in federal tobacco excise revenue—from $16 billion in 2020 to $7.4 billion in 2025.

    The federal government, however, has rejected calls to lower tobacco taxes, arguing that high excise rates and plain packaging have been effective in cutting smoking rates to 10.5% in 2024, down from 25% in the 1990s.

    The term “Laffer Curve” was made famous 50 years ago after Laffer drew it on a napkin at a meeting with then Ford Administration officials Dick Cheney and Donald Rumsfeld. Laffer said the concept wasn’t new, dating back to 14th-century writings.  

  • Australia’s Tobacco Policies Spark Harm and Chaos, Industry Expert Says

    Australia’s Tobacco Policies Spark Harm and Chaos, Industry Expert Says

    In a candid keynote at the Global Tobacco and Nicotine Forum (GTNF), Theo Foukkare, CEO of the Australian Association of Convenience Stores, delivered a scathing assessment of Australia’s tobacco and nicotine policies, saying the country is saddled with “harm and chaos.” Speaking under the theme “The Australian Experience: From Global Leader to Global Failure,” Foukkare outlined how once-successful public health strategies had collapsed under the weight of excessive taxation, poor enforcement, and the rise of organized crime.

    “Australia has become the model of what not to do. By any measure, it’s an absolute failure,” he said. “And believe it or not, our government still claims to have world-leading standards. We’re dealing with an absolute tsunami of illegal nicotine products entering the country. I call it ‘Tobacco Wars.’ It’s actually playing out in real life every day. The illegal nicotine market is now bigger than the next five organized crime categories combined.

    “Through bad policy, we’re actually creating harm,” he said, noting that smoking rates have remained virtually unchanged in the past decade despite mounting taxes and restrictions.

    “We had the most aggressive excise policy any government in the world had undertaken,” Foukkare said, with a legal pack of cigarettes now costing between $45 and $50. “They killed the golden goose, because the consumers said, “Enough is enough. Why would I pay this when there are cheaper options?”

    According to Foukkare, Australia’s extreme excise policies pushed consumers to the black market, eroding legal sales and fueling criminal activity. Organized crime groups, he added, have even begun taking over farms to grow illicit tobacco, while state governments scramble to form task forces.

    “There’s so much threat and intimidation,” he said. “Some store owners are paying $5,000 a month in protection money. Pay or they’ll burn your shop down. One store owner got a handwritten note saying he needed to meet with the [crime] boss. He took the note to the police, the next day, a car drove through the front of the store, and now it’s closed.”

    Foukkare criticized the government for ignoring early warnings about policy failures and dismissing data because it was industry-funded. Now, with estimates suggesting up to 60% of tobacco consumption is illicit, officials are finally acknowledging the scale of the problem. Foukkare also condemned the government’s anti-vaping stance, arguing that public messaging has convinced most Australians that vaping is more dangerous than smoking.

    Despite the creation of new penalties—million-dollar fines, landlord accountability clauses, and police powers to shut down stores—Foukkare said the measures have done little to fix the underlying issue. “We’ve spent a billion dollars and haven’t done anything to reduce smoking or keep people safe,” he said.

  • NSW Tobacco Licensing Enforcement Kicks In

    NSW Tobacco Licensing Enforcement Kicks In

    The three-month grace period for Australian retailers and wholesalers in New South Wales to apply for a license to sell tobacco and smoking products ends today (October 2). Enforcement of the Minns Labor Government’s new Tobacco Licensing Scheme begins tomorrow, meaning all businesses selling tobacco or non-tobacco smoking products must hold and display a valid license. Those trading without one risk heavy penalties, although applicants who lodged a valid application before the deadline can continue operating until their outcome is confirmed.

    The new Center for Regulation and Enforcement within NSW Health will oversee compliance, working with state and federal agencies. Under recently passed reforms, penalties for unlicensed sales will increase dramatically, with fines of up to A$660,000 ($435,600) for individuals and A$880,000 ($580,800) for corporations. New offenses also target illicit tobacco trade, carrying maximum penalties of A$1.54 million ($1 million) and/or seven years’ imprisonment.

  • Health Minister: Tobacco Black Market ‘Thriving’ Across Australia

    Health Minister: Tobacco Black Market ‘Thriving’ Across Australia

    Australia’s illicit tobacco trade has spiraled out of control, Health Minister Mark Butler warned, describing it as the country’s biggest threat to public health. He said organized crime has seized control of the multi-billion-dollar market, with violence, arson, and gang turf wars now common, and that the illegal trade also bankrolls other criminal activity, including drug and sex trafficking.

    The surge comes amid a decade of steep cigarette tax increases, which pushed the duty on a pack from A$10.62 in 2015 to A$28 ($7.01 to $18.48) today. While intended to reduce smoking, the policy has backfired according to officials: federal excise revenue has fallen, and the Australian Medical Association warns that smoking rates may be creeping up again. Experts say the black market now dwarfs legitimate sales, leaving policymakers struggling to strike a balance between public health and crime prevention.

    Butler said enforcement, rather than tax policy, is the real challenge, pointing out that criminal gangs can produce cigarettes for a fraction of the legal price, leaving Australia caught between soaring taxes and a thriving underground market. State leaders and opposition politicians are calling for urgent action. NSW Premier Chris Minns described repeated tax hikes as “feeding the illicit tobacco market,” while Shadow Health Minister Anne Ruston accused the federal government of weak leadership.

    “It is his government who has sat on its hands and allowed the black market to thrive due to their inaction and weak leadership,” Ruston said. “It is a clear indictment on the health minister, and his government, that it has taken this long for them to realize the extent of the problem.”

  • NSW’s New Laws Aimed at Curbing Illegal Tobacco Trade

    NSW’s New Laws Aimed at Curbing Illegal Tobacco Trade

    The New South Wales (NSW) Parliament passed sweeping new laws to crack down on the illegal tobacco trade, with offenders now facing some of the harshest penalties in Australia. Under the legislation, those convicted of selling illicit tobacco could face fines of up to A$1.5 million ($1 million), prison sentences of up to seven years, and the closure of their businesses. The measures will work alongside the state’s new tobacco licensing scheme, designed to make it easier to identify and remove rogue operators, and will be enforced by NSW Health’s newly established Centre for Regulation and Enforcement.

    The government said the reforms are aimed at protecting public health and safeguarding legitimate retailers, while disrupting the operations of criminal syndicates profiting from tax evasion, addiction, and youth exposure to tobacco.

  • Australia: Legal Cigarettes Plunge, Black Market Thrives

    Australia: Legal Cigarettes Plunge, Black Market Thrives

    Legal cigarette sales in Australia have dropped 22% in the past year, according to data published yesterday (September 3) from the Australian Bureau of Statistics; however, industry experts point out that not having the overall smoking rate mirror that number exposes the growing dominance of the black market and the challenges it poses for enforcement and government revenues. The Treasury expects tobacco excise collections to fall to A$7.1 billion ($4.6 billion) this year, down 57% from the 2019–20 peak of A$16.3 billion ($10.6 billion), despite years of sharp tax hikes.

    Excise increases of more than 280% since 2013 have lifted the price of a 25-pack to around A$50 ($32.50), driving many smokers toward illicit alternatives costing less than half as much. The Australian Border Force estimates organized crime controls 75% of the trade, smuggling in the equivalent of A$3 billion ($2 billion) in untaxed tobacco last year alone. More than 120 Victorian outlets have been fire-bombed since 2023 in gang turf wars.

    While smoking rates have nearly halved since 2010, health groups warn progress has slowed, even as public finances are squeezed.

  • NSW Introduces Harshest-Ever Crackdown on Illicits

    NSW Introduces Harshest-Ever Crackdown on Illicits

    The New South Wales government today (August 6) introduced sweeping new legislation to Parliament aimed at tackling the illegal tobacco and vaping trade, including some of the toughest penalties in Australia. Under the proposed laws, selling tobacco without a license could result in fines of up to A$660,000 ($429,000) for individuals and A$880,000 ($572,000) for corporations.

    Other key measures include:

    • New offenses for commercial possession or sale of illicit tobacco, carrying maximum penalties of over A$1.5 million ($975,000) and seven years’ imprisonment.
    • Closure orders for up to 90 days (short-term) or 12 months (long-term) for premises violating the laws.
    • Offenses for breaching closure orders, including entering or operating from sealed premises.
    • Lease termination powers for landlords and proposed penalties for those knowingly leasing to illegal sellers.
    • New laws against impersonating licensed sellers, resisting product seizure, or attempting to reclaim confiscated goods.

    The crackdown follows the recent rollout of a tobacco licensing scheme, designed to improve regulatory oversight and reduce black market activity.

  • Australia’s Illegal Tobacco Trade Surges to 50%

    Australia’s Illegal Tobacco Trade Surges to 50%

    “Australia’s illegal tobacco problem has made the proverbial transition from tragedy to farce,” wrote Alan Kohler for ABC Radio New Zealand, commenting on a new report that suggests Australia’s crackdown on tobacco through high excise taxes and strict regulations has backfired, with illegal cigarettes now making up half of all the nation’s sales.

    A study published earlier this year by FTI Consulting said 39.4% of cigarettes sold in the country were illicit in 2024, up from 14% six years ago. However, the firm updated its numbers in June and put the new figure at 50%.

    “We can now conclude that the strategy of taxing and banning nicotine addiction out of existence is a complete failure,” Kohler wrote. “The result is that organized crime is making about A$10 billion ($6.5 billion) a year in revenue. Who needs narcotics? With them, you risk lengthy jail time; with smokes and vapes, it’s a fine, but only if you’re very unlucky.”

    The federal government has seen tobacco excise revenue collapse from A$16 billion ($10.4 billion) in 2019 to just A$7.4 billion ($4.8 billion) this year. Experts blame excessive taxation, menthol bans, and the lack of coordinated enforcement. Only 1% of shipping containers are inspected, and selling illegal tobacco often isn’t even a criminal offence.

  • Queensland Seizes 45M Cigarettes, 350K Vapes in Black Market Crackdown

    Queensland Seizes 45M Cigarettes, 350K Vapes in Black Market Crackdown

    Queensland Health (Australia) seized 45 million illegal cigarettes, 350,000 vapes, and over six tons of loose-leaf tobacco since November 2024, as part of a statewide crackdown on the illicit tobacco trade. Authorities say new laws introduced in May have strengthened penalties and enforcement powers, aiming to dismantle the growing illicit tobacco network.

    The surge in black market activity comes despite recent government efforts to tighten enforcement. A 2024 Brisbane Times investigation found widespread illegal sales across Brisbane, with foreign brands like Manchester, Double Happiness, and ESSE openly sold at half the price of legal products.