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IMPERIAL BACKS ILLICIT TOBACCO REPORT Imperial Brands Australasia (IBA) has welcomed the tabling of a final report by the Parliamentary Joint Committee on Law Enforcement into illicit tobacco. IBA Head of Corporate Affairs and Legal Kirsten Daggar-Nickson and Regulatory Affairs Manager Gary Dickson presented to the committee in person with a submission that was referenced “widely” throughout the final report, providing encouragement that the industry position had been heard. “The illicit tobacco problem in Australia is out of control, with 20.7 per cent of the market now represented by illegal products, costing the federal government $3.2 billion in evaded duty, which instead is funnelled into criminal syndicates with links to serious crimes including human trafficking and terrorism,” IBA said. “IBA has been calling for increased enforcement capabilities at both federal and state level to address “The illicit tobacco problem in Australia is out of control, with 20.7 per cent of the market now represented by illegal products.” this considerable issue, and appeared before the joint committee to present industry intelligence which suggests criminal gangs are gaining in sophistication in order to evade authorities. “The report included eight recommendations for government to consider, which are largely supported by IBA and include the development of a national illicit tobacco strategy, and that enforcement be removed from the responsibility of the Department of Health and transferred to the Department of Home Affairs, which is responsible for border control and customs. “While the creation of the Illicit Tobacco Task Force on 1 July 2018 was a critical first step, much more needs to be done, with the most pressing area of policy reform being enhanced enforcement at the retail level, where currently there is only minimal action taken.” TOBACCO THE DARK SIDE OF TOBACCO The tobacco industry in Australia, according to TabSol, is arguably one of the most regulated and highly taxed industries. Previous administrations, under the guise of defending public health, the tobacco company says, have passed legislation and excise tax hikes that have made Australia one of the leading countries in terms of tobacco taxes. “Despite making changes to importation and warehousing laws, the government seems to have failed to control the entry of illicit tobacco products into the country,” TabSol said. “Today, one \[only\] needs to walk into an independently owned outlet \[to be\] offered an illicitly obtained product in almost eight out of 10 instances. So entrenched is this illicit trade that the orchestrators and peddlers are openly selling and even leaving name cards at outlets. “For an advanced country, it’s simply frustrating to see that our borders are so exposed and prone to smuggling.” “So entrenched is this illicit trade that the orchestrators and peddlers are openly selling and even leaving name cards The effects of this thriving illicit trade are far greater, says TabSol, and include: • Loss of revenue for legitimate tobacco suppliers and retailers. Some retailers quote about 10-15 per cent loss in revenue as a result of illicit trade. • Loss of revenue for the government through tax evasion. The cash economy evades GST and other taxes. • Loss of excise revenue for the government. Estimated at 20 per cent of the tobacco industry volume, the excise value that the government is missing out on would run into millions of dollars. • Infringement of trade mark laws as counterfeit products are readily available. • Creating a “culture of acceptance”. The more entrenched the illicit trade becomes, the more socially acceptable it is to retailers and consumers who think it is fine to engage in this trade by retailing or purchasing these products. This creates a culture of ignoring or disregarding laws. • The possibility of promoting underage smoking as illicit cigarettes and tobacco alternative products are much cheaper. “Unless the government enforces laws with higher penalties, the retailers and consumers will continue to generate demand for the criminal minds who plot and import illicit substances,” TabSol said. “TabSol Australasia strongly advocates against Illicit products and urges the authorities to also focus on middlemen and sub-wholesalers who promote the distribution of illicit products. Cutting off the availability and supply to retailers will thwart demand. “TabSol’s advice to retailers, who may succumb to the lucrative illicit trade, is to beware that the Illicit Tobacco Task Force is investigating several matters and will be clamping down on those involved.” at outlets.” MAR, 2021 RETAIL WORLD