AACS: ILLICIT TOBACCO FINALLY RECOGNISED AS A SERIOUS CRIME

March 1, 2018: The Australasian Association of Convenience Stores (AACS) has commended Liberal MP Craig Kelly for formally recognising – at long last – the huge impact the illicit trade of tobacco is having on the community and on small businesses.
The Government has proposed to introduce penalties of up to 10 years in prison for manufacturing illicit tobacco, with legislation passing the lower house and now to be reviewed by the Senate.
The legislation also proposes to create penalties of up to five years in prison for possessing, buying or selling illicit tobacco.
AACS CEO Jeff Rogut says it’s high time illicit tobacco is addressed in an appropriately serious manner.
“For too long, illegal cigarettes with branded logos, tax-free and with no quality control standards, have been sold with impunity in the community. It is worryingly easy for people to access these illegal products, and the lack of a proper response has seen the market spiral out of control,” Mr Rogut says.
“The AACS has been vocal about the need for authorities to crack down on these criminals and the legislation being progressed by the Government calls for tougher penalties, which are absolutely needed.
“We thank Mr Kelly for progressing these tougher penalties in recognition of the wide-ranging impacts the black market trade of tobacco is having in the community,” he says.
The AACS also commends Mr Kelly for acknowledging that tougher penalties should have been introduced when tobacco excises first pushed up cigarette prices.
Mr Rogut says it’s encouraging that the legislation has bi-partisan support.
“Convenience store owners and staff know first-hand the impact that excise increases and regulations like plain packaging have had on the market for illegal cigarettes. The regulatory environment for legal tobacco in Australia has made us one of the world’s most lucrative markets for organised criminals involved in the illicit tobacco trade,” Mr Rogut says.
“It’s encouraging that the enormity of this problem is now being acknowledged.”
Illicit tobacco accounts for nearly 14% of the total tobacco market in Australia, according to KPMG[1] estimates, and illicit products are being sold with impunity across Australia to anyone, potentially even minors, costing the Australian Government over $1.6 billion per annum in lost tax revenue.
AACS CEO Jeff Rogut says consumers may think they are saving some money by purchasing illicit tobacco products but in reality, they may be doing themselves considerable harm.
“With no genuine country of origin, no quality control standards, and no idea what these products contain, consumers may be putting themselves at more risk than they realise,” Mr Rogut says.
The AACS has consistently reinforced the major impact the trade of illicit tobacco has on responsible retailers of legal tobacco products. Adding to the burdens experienced by retailers are the higher insurance costs and additional security requirements they must have in place.
A summary of AACS research into public opinions on the illicit trade of tobacco is included overleaf.
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.
[1] Illicit Tobacco in Australia 2016, KPMG, May 2017