We echo the comments published last Friday by Senator Eric Abetz bemoaning the lack of accountability for cracking down on illicit tobacco – a crime which costs the Australian Government over $1.6 billion in lost tax revenue each year.
We have repeatedly called for clarity as to the authority responsible for cracking down on this crime, yet not the police, the ACCC, Border Force, the Department of Health or local councils have been willing to put their hand up.
Illegal cigarettes with branded logos, tax-free and with no quality control standards, are readily available in local markets and some retail shops across Australia. They can be easily purchased by anyone, potentially even minors, which obviously has dramatic safety and health repercussions.
It also robs responsible retailers of legal tobacco products of lost legitimate sales. The trade of illicit tobacco in Australia is at crisis point, where honest retailers are not only losing out financially, they are fearing for their safety.
Criminals are operating under everyone’s nose and those business people who play by the rules are afraid to speak up for fear of retribution at the hands of the gangs responsible for flooding the market with illegal products.
The AACS is calling on Government to issue a clear directive as to the authority responsible for policing the distribution and sale of illicit tobacco.
KPMG estimates just under 14 per cent of all tobacco consumed in 2016 Australia was illegal*. This adds up to billions in lost revenue to the Government.
As it stands, retailers caught selling such products with obsolete graphic health warnings or in non-plain packs face fines that run into the hundreds of thousands of dollars. Officials are routinely dispatched to catch out retailers possibly selling tobacco products to underage children in sting operations.
The AACS has consistently reinforced the major impact the trade of illicit tobacco has on responsible retailers of legal tobacco products.
The illicit market has an enormous impact on responsible retailers of legal product. The regulatory environment in Australia has seen us become one of the world’s most lucrative markets for illegal tobacco, and it’s having disastrous effects.
Violent robberies targeting cigarettes are happening with increasing frequency among retailers as high prices of legal tobacco, artificially imposed as a result of excessive government taxes, are endangering lives.
There are also cost burdens associated with higher insurance and additional security which must again be borne by retailers.
Enough is enough. It’s time for the buck passing to stop and for real solutions to be implemented.
* Illicit Tobacco in Australia 2016, KPMG, May 2017
Jeff Rogut, Chief Executive Officer, Australasian Association of Convenience Stores
