Criminals are producing counterfeit cigarettes with Australian-style plain packaging that could fool the public and authorities, sparking calls for the “urgent” passing of tough new illicit tobacco laws.
New intelligence provided to the federal government has confirmed illegal products are being manufactured on an “industrial scale” in Cambodia and other countries in South-East Asia in factories owned, financed and controlled by organised crime groups.
Recent offshore law enforcement operations have identified cigarette and tobacco products destined for Australia featuring the country’s standard green plain packaging and legitimate health warnings.
This has fuelled concerns the general public and Australian law enforcement agencies will have limited ability to distinguish between illegal and genuine cigarettes on appearance alone.
To tackle the issue, the government is seeking support from the Coalition and other senators to pass laws immediately that would give authorities new powers to shut down the illegal tobacco trade.
New powers to target illegal tobacco
The proposed laws would create new offences that allow authorities to rely on factors such as suspiciously cheap prices, branded packaging and concealed products to show tobacco entered Australia unlawfully.
The bill to modernise the Customs Act went through the House of Representatives earlier this week. It is expected to be debated in the Senate on Thursday, with Labor calling for it to be passed on the same day.
Assistant Minister for Customs Julian Hill said serious and organised criminal syndicates had “weaponised” the cheap oversupply of tobacco globally and would “do anything to make a buck”.
“The crooks will continue to adapt their tactics, with recent intelligence suggesting they’re now counterfeiting Australian-style plain packaging,” he said.
“This highlights the urgency of equipping state, territory and Commonwealth authorities with these new powers to go after anyone involved in the illegal tobacco trade, including the supply chains and retail outlets.”
Criminal networks producing cigarettes offshore
Australian authorities have been working with partners in South-East Asia to disrupt the illicit tobacco trade offshore.
This year Cambodian authorities destroyed about 1,200 tonnes of counterfeit cigarettes and seized associated production materials.
Labor has argued its proposed laws would help shutter illegal tobacco operations, even though offshore factories are producing increasingly sophisticated duplications of Australian packaging.
The new offences would not let criminals hide behind seemingly authentic packaging, because law enforcement could also consider objective facts and observable conduct.
This could include a cigarette packet priced substantially below the current cost of the tobacco excise, or products being concealed in a shop.
Labor resists calls to cut tobacco excise
Labor has resisted political pressure to reduce the tobacco excise to incentivise more Australians to return to legal cigarettes, arguing only increased enforcement would tackle the black market without driving up smoking rates.
The government has pointed to new data from Queensland showing legal cigarette sales rose sharply after the state implemented stronger powers to shut illegal shops.
Calls to Quitline also more than doubled in the 10 days after major enforcement operations, suggesting the crackdown may be encouraging some smokers to quit.
More than half of the tobacco consumed in Australia last year was bought illegally, with the black market share jumping to 80 per cent when vapes, pouches and other nicotine products are included.
To address this, the Coalition has vowed to cut the tobacco excise by 80 per cent if elected, dropping the price of a standard pack from between $40 and $50 to about $16 to $26.
One Nation has released a policy to slash the tax on cigarettes by 75 per cent and freeze indexation for three years.
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