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TOBACCO ILLICIT TOBACCO CONSUMPTION AT RECORD HIGH Australia’s illicit tobacco consumption has reached an ‘all-time high’ and as tobacco excise pushes the cost of cigarettes to record levels, a new report has revealed one in every five cigarettes smoked is an illegal product. Illicit trade now accounts for around 20.7 per cent of total tobacco consumption in Australia, an increase from 14.1 per cent last year, according to the annual KPMG report into the tobacco black market. This is supported by the number of undeclared tobacco seizures, which rose to 286,663 in 2018/2019, an annual increase of 46 per cent. “Rather than discouraging people from smoking, we believe that multiple tobacco excise increases have sent smokers to the black market in search of cheaper tobacco,” Imperial Brands Australasia Head of Corporate and Legal Affairs Kirsten Daggar-Nickson said. “In its submission to the Parliamentary Joint Committee into Law Enforcement earlier this year the Australian Border Force said excise increases may impact the size of the illicit tobacco market, as the rising cost of licit tobacco may drive increased demand for cheaper alternatives, including illicit tobacco.” Ms Daggar-Nickson says smoking rates in Australia had remained relatively flat since 2014, despite the world’s toughest tobacco control measures. “There are still around three million smokers in Australia, with official data showing that between 2014-15 and 2017-18, the daily smoking rate remained ‘relatively similar’, only declining from 14.5 per cent to 13.8 per cent,” she said. “Already there are an estimated 227,000 vapers in this country \[Addictive Behaviours, August 2019\] who import smoke-free products such as nicotine-containing e-cigarettes and heated tobacco devices because they’re not legally available in Australia. “Smoke-free products are already available in more than 50 countries around the world. In order to achieve its 10 per cent smoking rate goal, the government should acknowledge that smoke-free alternatives can play a role and have a positive impact on public health in Australia.” Ms Daggar-Nickson says the illicit tobacco trade is supporting the criminal activities of syndicates with links to terrorist groups instead of funding vital government projects. “The Police Federation of Australia says it is universally agreed that serious and organised crime is behind the illicit tobacco trade, with investigations suggesting it is under the control of Asian and Middle Eastern crime gangs, and fears links are being established with South American gangs. “This is a massive issue which needs to be addressed. Since the illicit trade was first measured in Australia in 2012, evaded duty has cost the government more than $12 billion. “As recently as mid-April, police charged a man with terror links who had also been involved in the illicit tobacco trade, further proof of these syndicates operating in Australia. “We know many small businesses are suffering severe losses and facing closure as criminal elements continue to flush the market with illicit products. Organised crime continues to strengthen its foothold, actively operating via the dark web and offering refund guarantees for seized orders. “Federal government agencies including the Australian Border Force, Australian Tax Office and the Illicit Tobacco Taskforce have had encouraging success dismantling larger operations, but increased funding and resources must be directed to state- based investigations. “In addition to more resources directed at a federal level, we need targeted, state-based taskforces to focus on retail enforcement in suburban areas.” AACS responds to report The AACS believes this research should worry every Australian. “Legal tobacco is subject to regular, excessive excise increases that drive consumers, many of whom are in lower socio-economic brackets, to the illegal market,” AACS CEO Jeff Rogut said. “There is clear evidence of this, and the latest illicit tobacco figures emphasise how widespread this crime has become. “Criminals are supplying illegal cigarettes to communities across the country in massive numbers, to people of any age, and through some dodgy retailers who are completely aware that they’re engaging in a criminal activity, yet continue to act with impunity. “At a time when small, law-abiding businesses need support more than ever before, the regulatory environment for legal tobacco is driving consumers away from legitimate businesses. To support honest retailers, and to protect the community from illegal products, we need a moratorium on excise increases on legal tobacco as a matter of absolute urgency.” CONVENIENCE WORLD JUL/AUG, 2020