Authorities have raided nearly 400 premises in their pursuit of the illegal tobacco trade

Nearly 400 premises have been raided in a statewide crackdown on the illegal tobacco trade and now, their locations have been revealed.

Authorities have raided nearly 400 premises in their pursuit of the illegal tobacco trade in the past 10 months as sales of the illicit products continues to soar.

New data obtained by The Advertiser reveals Consumer and Business Services have conducted 394 raids across 152 suburbs across SA since July last year. The premises targeted include various stores such as tobacconists, gift shops and other similar locations, plus some not registered to sell cigarettes.

Most of the premises were located in the Adelaide CBD with 30 searches, followed by Mount Barker (12) and Mount Gambier (12), then Salisbury East (11), Elizabeth (11) and Port Augusta (11).

Tax on tobacco

The federal government has regularly increased the tax on tobacco goods in a bid to lower the number of smokers in Australia.

In 2010, smokers were hit with a 25 per cent increase on smokes, which was followed by annual hikes of 12.5 per cent between 2013 and 2020.

Under recent laws, the tax component for a packet of cigarettes will increase in March and September each year.

Since March 1 of this year, smokers have been paying $1.40 in tax per cigarette.

This means the consumer pays at least $28 in tax for a 20-pack of cigarettes, which costs about $50.

Rise of illicit sale of tobacco

As the cost-of-living crisis continues, organised criminal syndicates have exploited addiction by selling illicit tobacco at a lower price – undercutting the legal market.

A 20-pack of under-the-counter pack of ciggies sells for as little as $15, compared to $50 from a legal outlet.

Sharon van Homelen saves hundreds of dollars a months by buying illicit smokes. Picture: Brenton Edwards

Sharon van Homelen, who has been addicted to smoking for decades, said she saved hundreds of dollars a month by purchasing illegal smokes.

“Since switching over to the cheaper packs about six months ago, I’m saving about $400 a fortnight,” Ms van Homelen said.

“I need that money for other necessary everyday expenses like grocery shopping and rent.

“I’ve tried quitting but I’ve been smoking since I was 17 years old and I’m 55 now, it’s not as simple especially when you’re used to having up to eight ciggies a day.”

The first illicit tobacco store Ms van Homelen frequented was firebombed – but she was able to find another one nearby quickly.

“These (illicit) shops get firebombed and fined all the time but they make so much profit they always reopen or just pay their fine and keep operating,” she said.

Criminal activity

The lucrative tobacco market has sparked cross-border wars between rival gangs that are competing to seize control over the importation and sale of illicit cigarettes.

Since July, there have been 18 alleged arson attacks on tobacco shops in South Australia.

The attacks are allegedly being carried out by underworld gangs as an intimidation tactic on tobacco distributors in a bid to force them to pay a fee or levy to organised crime groups or to put them out of business.

One of the worst incidents occurred late last year in Cowandilla, where alleged perpetrators smashed the shop window, poured petrol across the store and torched the premises.

When firefighters arrived, residents living above the store had to be woken and evacuated, including Harkirit Singh as well as his wife, eight-month-old daughter and mother-in-law.

A Cowandilla shop selling illicit tobacco on Sir Donald Bradman Drive a was firebombed. Picture: Supplied

A Cowandilla shop selling illicit tobacco on Sir Donald Bradman Drive a was firebombed. Picture: Brenton Edwards

Operation Eclipse

SA Police formed special taskforce Operation Eclipse on September 15, 2024 after the state experienced six arson attacks across two monthssuspected of beingrelated to the trade of illicit tobacco.

Detective Chief Inspector Brett Featherby, who heads the Operation Eclipse, has been working alongside Victoria Police, Australian Border Force and Consumer and Business Affairs investigators to prosecute illegal tobacco traders.

Through joint efforts, the taskforce has made 33 arrests and searched 47 residential properties, 122 business premises and 14 storage facilities.

They have also seized more than $16.2m worth of illicit tobacco and $2.1m in cash.

But for criminals, the risks involved in illicit tobacco trade are outweighed by the reward.

The Australian Criminal Intelligence Commission has previously stated that organised criminal syndicates only need one out of 30 shipping containers to pass border controls to still make a profit – allowing criminals to maintain and fund their other illegal activities.

Meanwhile, The Advertiser revealed last month organised crime syndicates that supply tobacco stores are pocketing several million dollars every month, while illicit shops on average earn between $900,000 and $1.3 million a month.

Authorities have seized more than $80,000 with of illegal tobacco and vape products as part of a state government crackdown. Picture: Elizabeth Henson

SA government penalties

The state government has recently introduced some of the harshest penalties of any state and territory in the nation for anyone found guilty of supplying or possessing ‘commercial’ and ‘large commercial’ quantities of prohibited tobacco products.

A person possessing a large commercial quantity of tobacco will face a fine up to $2.1m for the first offence and up to $4.2m for a second or subsequent offence.

Meanwhile, a business faces an initial fine of up to $4.5m and then $6.6m for further offences.

The introduction of heft fines follow a legislation change last year that gives the Consumer and Business Services minister authority to close tobacco shops suspected of selling illegal products for 72 hours. So far 21 stores have been shut down.

The minister can also apply to a magistrate to order a six-month closure.

Consumer and Business Affairs Minister Andrea Michaels and Commissioner for Consumer Affairs Brett Humphrey boast biggest illicit tobacco bust with $1 million worth of product seized at a single store. Picture: Keryn Stevens.

Consumer and Business Affairs Minister Andrea Michaels said the government invested $16m mid last year to create a taskforce within the department to allow for a swift and harsh response against the illicit tobacco trade.

“We have seen fire bombings connected to the illicit tobacco trade take place around the country – including here in South Australia – and profits from illicit tobacco are used to pursue other criminal activities including the manufacturing and importation of drugs and weapons,” she said.