AACS WELCOMES ILLICIT TOBACCO CRACK DOWN

May 9, 2018: The creation of a dedicated task force to crack down on the production and sale of illicit tobacco, a crime which is plaguing communities across Australia, is both a welcome and necessary move, says the Australasian Association of Convenience Stores (AACS).
Last night’s budget at long last recognised the enormity of the illicit tobacco market in Australia, says AACS CEO Jeff Rogut.
The AACS has worked for many years to highlight the enormous damage the black market sale of tobacco does to convenience retailers and the community at large.
“The establishment of a task force to target the criminal gangs involved in illicit tobacco is an important step welcomed by the industry. It is a necessary component of a coordinated effort to create a safer environment for people working in the convenience industry as well as the general public,” Mr Rogut says.
“But it’s a move that will need to be supported by the regulatory and policy environment. A moratorium on future legal tobacco excise increases, at least until the measures to crack down on the illicit market begin to bear fruit, will be necessary to bring the situation under control.
“Additionally, Government could look to make alternative products such as eCigarettes legally accessible as a safer alternative for people looking to quit traditional tobacco.
“There is already a growing black market for eCigarettes in operation in Australia and it would be shameful to allow this market to approach the extent of the illicit tobacco problem.”
Regular excise increases on legal tobacco have positioned Australia as one of the world’s most lucrative markets for black market tobacco.
More than just lost sales of legal tobacco for retailers, convenience stores face higher costs in terms of insurance and security.
“The high cost of legal tobacco directly contributes to the increase in violent robberies committed against people who work in our industry, as cigarettes are typically a major target of thieves,” Mr Rogut says.
“The huge growth of illicit tobacco and its popularity with consumers, not to mention its accessibility, reinforces the failure of legal tobacco policy in recent times. Excise increases and plain packaging are costly initiatives that have had no discernible positive impact on smoking rates.
“To those of us who work in retail, the rise of illicit tobacco was inevitable on the back of such policies. The Government of the day failed to listen to the concerns of the industry ahead of the introduction of plain packaging and the exponential growth of illicit tobacco coincides with this policy decision.
“It’s time for Government to recognise that, in planning new legislation or regulations that affect industries like ours, that they do not in fact know better than actual industry practitioners. Genuine consultation should be the first part of the process,” Mr Rogut says.
The new budget measures announced last night include powers for the tax office to charge duties, the requirement for a permit to import tobacco, and a renewed effort to close down illegal chop-chop tobacco crops.
The establishment of a dedicated task force comes not a moment too soon. According to the Illicit Tobacco in Australia 2017 Full Year Report recently releases by KPMG LLP, the proportion of illicit tobacco consumption rose from 14.3% of total tobacco consumption in 2016 to 15% in 2017.
In dollar terms, this cost the Australian Government $1.91 billion in excise that would have otherwise been collected from legal tobacco sales last year.
A summary of AACS research into public opinions on the illicit trade of tobacco is included below.
Further information:              
Jeff Rogut
Chief Executive Officer
Australasian Association of Convenience Stores
Ph: +61 467 873 789
Media enquiries: 
Stephen Naylor
Wise McBaron Communication
Ph: +61 (2) 9279 4770
AACS RESEARCH: PUBLIC ATTITUDES TOWARDS ILLICIT TOBACCO 
A survey commissioned by the AACS and completed in September 2016 shows that: The biggest single consumer concern is that it is a revenue-earner for organized crime, who use that revenue to expand their criminal activities, including into socially damaging areas like ice production and distribution.
A total of 4,000 Australian consumers aged 18+ years (and eligible to vote in State/Territory and Federal elections) were interviewed using a combination of online and telephone interviews.
A summary of the key findings is included overleaf.
THE VIEW OF CONSUMERS: PUBLIC OPINIONS ON ILLICIT TOBACCO