Costly smokes creating black market demand

AUSTRALIAN ASSOCIATED PRESS
28 February, 2018

Prohibitively expensive cigarettes in Australia have created a black market demand for illicit tobacco, Liberal MP Craig Kelly says.

The government has moved closer to introducing penalties of up to 10 years in prison for manufacturing illicit tobacco, with legislation to create new offences passing the lower house on Wednesday night. 

Mr Kelly told parliament that the new offences and penalties should have been introduced when tobacco excises first pushed up cigarette prices. 

“We know that the illegal activities are going to ramp up every time we ratchet the duties up and the excises. Every time that lawful cigarettes become more expensive there’ll be greater and greater black market activity,” he said. 

“We have to respond and put the appropriate resources into law enforcement to making sure that they have the resources that they need and also making sure that the penalties are appropriate.”

If legislation is given the nod in the Senate it will create penalties up to five years in prison for possessing, buying or selling illicit tobacco, or 10 years for its manufacture. 

The proposal has bi-partisan support.

Labor MP Shayne Neumann said since the Australian Border Force’s tobacco strike team was established in October 2015, it had seized 104 tonne of smuggled tobacco and 233 million smuggled cigarettes. 

“The illicit tobacco trade undermines the Australian government’s strategies in terms of prevention and control of tobacco products,” he said.

He said ABF also had evidence of strong links between illicit tobacco and serious organised criminal gangs.